Shippers 2025 Annual Review & Outlook
Executive Commentary
a wide variety of often compelling reasons . Nearshoring presumably attempts to account for some of them while providing a populist smokescreen of nationalism . Punitive tariffs often do not provide the underlying benefits espoused by its cheerleaders , but rather simply inflate end-user costs and contribute to many small and midsize businesses struggling to sustain their businesses and service their customers . New Section 301 duties imposed in late 2024 increased costs on some medical supply items 100 %, doubling the cost of goods sold in a matter of 15 days .
The notion of “ just build your factory in the USA ,” is shockingly naïve and simplistic . Protectionist propaganda like this does nothing more than to stoke political tension rather than provide any serious economic argument . Instead , supply chain resiliency should become the priority for any global business . Having a supply source in multiple countries , not just China , is a smart start ; however , it takes time to locate optimal options , train new staff and build trusting relationships .
SMEs , also faced with high interest rates on investment , must make difficult decisions regarding how to navigate the current protectionist environment . Many will right size their businesses , having the opposite effect than what the populists desire .
Wine and Spirits Shippers Association ( WSSA )
Alison Leavitt
Managing Director www . wssa . com
In the last few years , the opening of each ARO commentary could begin with “ What a difference a year makes .” Déjà vu this year , once again proving that stability in the logistics market seems to have gone the way of the dodo . The high level of global risk due to war , labor and politics drives shipping volatility , creating a wide variety of supply chain challenges in 2025 .
“ Red meat exporters have recently experienced an increase in theft losses , especially when containers are shipped through California to ports on the West Coast and when shipments are trucked to customers in Mexico .”
Dan Halstrom
“ Volatility is currently the rule and not the exception , making it increasingly difficult for importers and exporters to plan and budget with any certainty .”
Alison Leavitt
US Meat Export Federation ( USMEF )
Dan Halstrom
President and CEO www . usmef . org
Similar to many US industries , pork and beef exporters anxiously await conclusion of the new longshore workers ’ contract on the East and Gulf coasts . While the majority of waterborne red meat exports depart the United States off the West Coast , East and Gulf coast ports are also critically important for serving our international customers . About 45 % of pork exports and nearly 30 % of beef exports utilizing ocean freight are shipped from East or Gulf coast ports , including shipments to Europe , the Middle East , Caribbean , and Central and South America . In 2024 , red meat exports moving through these ports were valued at about $ 100 million per week , so any type of interruption will be costly for our industry .
Another major issue of concern is cargo theft and security . Red meat exporters have recently experienced an increase in theft losses , especially when containers are shipped through California to ports on the West Coast and when shipments are trucked to customers in Mexico . Because red meat shipments are perishable and strictly regulated , cargo thieves don ’ t even have to be successful for exporters to suffer major losses . Even when the product is not stolen , a broken container seal can often force its destruction . The US Meat Export Federation has worked with our member companies and industry partners to bring greater attention to this issue , and we are hopeful that the uptick in cargo theft incidents can be reversed in the coming year .
The US red meat industry has spent decades building a reputation as a reliable supplier of pork , beef and lamb throughout the world . To maintain this status , we need smooth port operations and heightened security on key transport routes .
We entered 2024 expecting a “ normal ” year , with overcapacity and relatively stable rates and services . The unexpected events unfurled from the attacks in the Red Sea by Houthi rebels , to the ongoing war in Gaza and beyond , to the International Longshoremen ’ s Association ( ILA ) labor strike . Volatility is currently the rule and not the exception , making it increasingly difficult for importers and exporters to plan and budget with any certainty . This submission is prior to the US presidential election , but the threat of import tariffs and potential cancellation of the 5-year suspension of the retaliatory tariffs under the World Trade Organization civil aircraft cases create additional uncertainty , along with the pending ILA contract resolution and potential for another strike .
The list of unknowns goes on with the upcoming changes in the ocean carrier alliances . Schedules and agreements are still being worked out
as we attempt to formulate solid contracts for 2025 . As a global shipping association , our goal is to navigate the uncertainties , control what we can , and explore and communicate all options to our members . Our area of beverage alcohol is also evolving , with the noand low-alcohol products growing and wine consumption declining , proving once again that change is inevitable . What we do know is that international trade will go on as it has for hundreds of years . Resiliency is the goal and solid relationships with our carriers — whether they be steamship lines , domestic truckers , transload operators or affiliated trade associations — are essential . Expertise in all levels of logistics is more valuable than ever .
18 Journal of Commerce | January 6 , 2025 www . joc . com