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Importers Race Against Tariffs & Strikes
West Coast ports hit record high containerized imports ahead of the ILA's Jan 15 strike and Trump administration tariff threats
Mobius Intel Brief:
Containerized cargo imports to West Coast ports are reaching record highs as merchants brace for the compound effects of an increasingly probable Jan. 15 ILA port strike and a rebound in Trump administration tariffs.
Key Intel:
Two days after resuming contract negotiations in November, the International Longshoremen’s Association (ILA) broke off talks with shipping firms within the US Maritime Alliance, citing zero tolerance for port automation terms.
As noted in October, the ILA’s anti-technology dialogue indicates elevated odds for a lasting strike and material supply chain disruption in early 2025.
Merchants’ race against perceived strike and tariff threats has buoyed container freight rates to 2YR seasonal highs and restructured US supply chains to the West Coast — far from the ILA’s East Coast influence but similarly distant from final customers.
Loaded container imports to the Port of Los Angeles hit a three-year seasonal high in October, just shy of the record levels set in 2020-21.
Meanwhile, loaded container imports to the Port of Long Beach have recorded new all-time monthly highs for five-consecutive months.
East Asia to US West Coast container freight rates reached rare parity with East Coast to US East Coast rates on concentrated demand for West Coast port capacity.
As shown by this week’s uptick in PCE inflation data, incremental supply chain costs will ultimately pass from producers to consumers and into the Fed’s ‘rate cut information funnel’.
The resurgence of inflationary pressure, coupled with worsening business and consumer debt quality after two years of sustained high borrowing costs, raises questions about the U.S. labor market's strain tolerance — a macro uncertainty that filters into 2025’s commodity demand prospects.
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This commentary contains our views and opinions and is based on information from sources we believe are reliable. This commentary is for informational purposes, should not be considered investment advice, and is not intended as an offer or solicitation with respect to the purchase and sale of commodity interests or to serve as the basis for one to decide to execute derivatives or other transactions. This commentary is exclusively intended for Mobius clients and is not considered promotional material.