Strikes at East and Gulf Coast Ports Draws Closers as Diesel Declines

Looming Strike at East and Gulf Coasts Ports Amid Falling Fuel Prices

Nick Terry • September 26, 2024

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At this point, the impending International Longshoremen’s Association (ILA) strike, which will impact container port operations from Boston to Houston, is likely inevitable. With major consequences bound to shake up the economy and supply chains across various industries, it is unclear how stakeholders can avoid it.

Diesel prices continue to decline amid bearish markets driven by factors like Libya's reduced oil exports and notable short positions across the market. Futures, on the other hand, have rebounded slightly, prompting a major bank to revise its downward forecast. Explore all this, and much more, in this edition of the newsletter.

Strike Threat at East and Gulf Coast Ports Sparks Concern

The impending contract expiration between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance is poised to shake up the shipping world. The current agreement, which covers container ports from Maine to Texas, will end on Sep. 30. Still, with no formal contract negotiations held for months, the threat of a major disruption looms as the deadline approaches.

The union rhetoric continues to intensify, with the ILA preparing for a strike beyond just a "potential" at this point. In anticipation of disruptions, retailers have frontloaded shipments and continue to shift cargo to the West Coast ports. However, that may not be enough to avoid disruptions and their ripple effects across various supply chains. They could hurt imports and exports and lead to backlogs.

The obvious victims are delayed holiday shipments, partial or complete halting of manufacturing supply chains, and agricultural exports. Experts are warning that such a strike could have significant economic repercussions, similar to the 2002 West Coast port lockout, which cost the U.S. economy $1 billion per day.

Bearish Market Sees Diesel Prices Decline for 10th Straight Week

Diesel prices are still searching for a bottom as the average weekly retail diesel price dropped for the tenth consecutive week. Today, the average retail price sits at $3.526 per gallon, down by 33.9 cents over that period. The current benchmark price is about $1.10 lower than a year ago.

The recent decline in retail prices mirrors the drop in ultra-low sulfur diesel (ULSD) futures, which hit a low of $2.058 per gallon on September 10. However, since then, ULSD prices have slightly rebounded, closing at $2.0958 on Monday. Despite this, the market remains largely bearish, driven by factors like Libya's reduced oil exports and a notable increase in short positions in the Brent crude market.

UBS has also revised its oil price forecasts downward, projecting $75 per barrel for Brent crude in Q4, down from a previous estimate of $83.

Retailers and Manufacturers Continue to Brace for Potential Disruption

Retailers and manufacturers brace for the potential impact of the multibillion-dollar disruption of their supply chains and the economy if the ILA goes on strike starting October 1. The looming strike will primarily affect major East Coast and Gulf Coast ports. Still, considering that many businesses are already redirecting shipments to the West Coast, it could lead to massive congestion at these ports.

The current contract between the ILA and the United States Maritime Alliance, which covers 25,000 workers and also represents port management, expires on September 30. Businesses and supply chains have spent months preparing for this, with many frontloading shipments or shifting imports to the West Coast to avoid disruptions during the peak holiday season. However, it is increasingly clear that this only slightly solves the problem.

A strike would impact billions of dollars worth of imports and exports, and stakeholders are currently panicking. Retailers fear delays in holiday shipments, manufacturers worry about supply chain breakdowns, and farmers could lose access to overseas markets.

The National Retail Federation (NRF) and the National Association of Manufacturers (NAM) have warned that a prolonged strike could raise costs, disrupt supply chains, and result in job losses.

Freight Market Remains in Trough as Expenditures Decline in August

Data from August 2024 Cass Information Systems shows the U.S. freight market is still experiencing a trough. Shipments declined 1.9% year-over-year (y/y), following a 1.1% y/y decline in July. However, the drop was smaller than expected.

On the other hand, seasonally adjusted shipments improved by 1% from July, marking a second consecutive monthly increase, though they remain 12.3% below 2022 levels. Freight expenditures dropped 9% year over year and 1.3% from July, reflecting the overall decline in freight spending, with "inferred freight rates" down 7% year over year.

The Cass Truckload Linehaul Index, which tracks core linehaul rates excluding fuel surcharges, also showed a 3.3% y/y decline. Market overcapacity has kept bids competitive, resulting in stagnant contract freight rates despite a slight increase in spot rates. According to industry leaders and experts, the industry continues to recover slowly from a prolonged recession, with no significant market inflection yet.

Industry Unites to Electrify Interstate 10 Trucking Corridor For Zero-Emission Freight

A coalition of industry giants, including Microsoft, PepsiCo, Maersk, DB Schenker, and AIT Worldwide, is spearheading an initiative to electrify the Interstate 10 trucking corridor, which runs from Los Angeles to El Paso, Texas. The effort focuses on developing charging infrastructure for long-haul battery-electric trucks along this key trade route, which connects the nation’s busiest ports to the second-largest border crossing.

The project, part of the U.S. government's National Zero-Emission Freight Corridor Strategy, is supported by TeraWatt Infrastructure, which will provide charging solutions at six hubs along I-10. PepsiCo and Maersk, with their massive fleets and ambitious sustainability goals, are leading the charge, along with DB Schenker, which was recently acquired by DSV.

The initiative reflects a broader effort to build a sustainable logistics framework and accelerate truck electrification, contributing to significant carbon reduction. The I-10 pilot project is set to create a blueprint for scaling fleet electrification across the country.

Alabama Jury Awards $160 Million in Truck Rollover Case Against Daimler

In a nuclear verdict that shocked the freight world, an Alabama jury awarded $160 million in damages to Leonard Wiley Streets, who became a quadriplegic after a 2022 rollover accident involving a Western Star truck manufactured by Daimler Truck North America. The accident occurred when another vehicle veered into Streets' lane, causing his truck to overturn.

The jury in the case awarded Streets $75 million in compensatory damages and $75 million in punitive damages, while his wife received $10 million for loss of consortium. The case centered on allegations that design flaws in the truck's roof structure and suspension seat contributed to Streets' severe injury, though Daimler disputed the claims and plans to appeal.

Despite the shock of the verdict, it is just the second major product liability verdict against truck manufacturers in recent weeks, following a $462 million verdict in St. Louis against Wabash National Corp.

Biden Administration Proposes De Minimis Reform to Curb Abuse

The de minimis exemption allows imports below $800 to avoid duties and taxes, but pressure has been mounting on the Biden-Harris administration to reform or eliminate it. The administration has pushed new proposals that would eliminate de minimis eligibility for shipments covered by Section 301, 201, and 232 tariffs to prevent foreign businesses, particularly from China, from exploiting the exemption.

Key changes include enhanced information collection, requiring importers to file tariff classification numbers and certificates of compliance electronically with U.S. Customs. The administration also called for Congressional action to pass additional de minimis reforms, focusing on protecting U.S. workers and industries, particularly the textile and apparel sectors.

Finally, It is important to note that multiple legislative proposals related to de minimis reform have been introduced but have not yet been passed.

Navigating The Freight Market With Entourage Freight Solutions

Entourage Freight Solutions stands out with its extensive background and expertise in food service logistics. Our unique approach, honed in the food supply chain, ensures an unmatched service level and extreme attention to detail in meeting all our shippers’ needs.

Our platforms use the latest cloud-based, GPS-enabled technologies. They can track drivers regardless of location, continuously reroute shipments based on the dynamics at play, such as weather or traffic, and account for real-time changes in market rates. At EFS, we offer a broad range of unsurpassed services. These include:

Full Truck Load (FTL): For shipment requiring a dedicated whole truckload.
Less than truckload (LTL): For companies moving multiple LTL shipments to different locations or consolidating LTL goods from other companies to get a lower all-in rate.
Refrigerated Trucking or “Reefer” Transportation: Leveraged to avoid spoilage and damage to temperature-sensitive goods.
Cross Docking: With locations in Shelby, Ohio, Cedar Rapids, Iowa, and Romulus, Michigan, that serve as cross-docks for strategic consolidation, storage, and end-to-end distribution programs.

Request a quote today to see how Entourage Freight Solutions can help with your freight movement and other supply chain needs.

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Tariffs, Trade Policy, and the Great Freight Fallout

By Nick Terry • April 28, 2025

In 2025, trade policy is no longer something that the freight industry can leave on the back burner. Trade policy today is shaping strategy at every level. From tariff escalations and retaliatory duties to sweeping regulatory changes and targeted maritime fees, supply chain leaders are navigating a freight market in which unpredictability is the only constant. Sourcing decisions are shifting, pricing dynamics are unstable, and long-standing operational models are being rewritten in real time. This edition brings together key stories highlighting the growing pressure across logistics channels. Each development points to an industry moving fast, and often reactively, to keep pace with volatile policy decisions. Tariffs Stall US Freight Recovery as Shippers Pause Orders The recent move by the U.S. Trade Representative (USTR) to impose entrance fees on Chinese-built ships calling U.S. ports has only added to the confusion and uncertainty gripping global supply chains and freight operations. Shippers are pausing plans and slashing orders, with truckload volumes, containerized imports, and manufacturing output all showing signs of contraction. Ocean freight spot rates have collapsed: Asia-U.S. West Coast rates have fallen 61% since January to $2,050 per FEU, while East Coast rates have dropped 53.7% to $3,100 per FEU . Blank sailings are rising, with vessels leaving Asia half-empty. Amazon and Five Below are among the major retailers reducing orders from Asia. Container imports jumped 15.3% in 2024, but forecasts now predict a 20-27% decline through the summer. Exporters, particularly agriculture and forestry suppliers, are also squeezed, facing 125% retaliatory tariffs from China. Truckload and intermodal rates remain stagnant, while U.S. factory output fell sharply in March. US Apparel Importers Brace for Long-Term Volume Declines According to Trade Partnership Worldwide, a 124.1% tariff on Chinese clothing and footwear is expected to reduce U.S. apparel imports by 1.6% annually . China still accounts for 41.7% of apparel shipments, leaving limited flexibility for diversion. The American Apparel and Footwear Association (AAFA) is warning of price hikes and mounting infrastructure stress as sourcing pivots toward Vietnam, India, and Indonesia. A looming May 2 deadline for de minimis exemptions could further complicate flows and delay deliveries. Even with a temporary 90-day pause in reciprocal tariffs, the policy uncertainty already affects long-term planning. AAFA CEO Steve Lamar calls the shifting policies “chaotic,” and warned that high tariff pressure will hit both importers and U.S. manufacturers reliant on Chinese components. Port and rail capacity limitations at larger gateways are adding to concerns. Retailers now face rising costs, shrinking margins, and operational delays — all while consumer demand continues to shift rapidly. Freight Pricing Gains Lose Momentum According to the TD Cowen/AFS Freight Index, Q1 truckload rates rose 5.9% above the 2018 baseline, but are expected to decline slightly in Q2. Shippers are responding to tariff threats with aggressive front-loading and shorter-haul routes, driving per-shipment costs to three-year lows. LTL carriers remain focused on profitable lanes and high-quality freight rather than chasing volume. The index forecasts a 0.7% year-over-year increase in LTL rate per pound for Q2 , despite sustained demand softness and macro uncertainty. A key driver behind the softening spot market conditions is a shift to shorter hauls and regionalized distribution, pushing per-shipment costs to their lowest point in more than three years. This trend reflects how retailers and manufacturers are repositioning inventory in response to tariff volatility, as NRF’s Jonathan Gold and DAT analyst Dean Croke noted. Meanwhile, the LTL sector is seeing a 4% rise in fuel surcharges, offsetting lower weights and shorter hauls. With the freight market still under pressure after 26 months of contraction, optimism remains subdued as we enter the midyear period. US Truckload Freight Spot Rates Continue to Fluctuate National benchmark rates have experienced a decline across all categories. As of April 18, dry van decreased by 4 cents to $1.62, reefer by 2 cents to $1.88 , and flatbed by 3 cents to $2.16. This marked the first overall decrease since late January, signaling potential shifts in market dynamics. These changes can be attributed to factors such as tariff uncertainties and tighter capacity, especially affecting the flatbed market. Flatbed rates rely heavily on manufacturing activity in the country, which has been particularly hard-hit by the ongoing trade war with China, and to some extent, with the rest of the world. US Finalizes Tiered Fee Plan Targeting Chinese Ships The U.S. is moving forward with a revised plan to levy voyage-based fees on Chinese-owned and Chinese-built ships calling at American ports. The U.S. Trade Representative (USTR) announced the measure as part of a broader Trump administration effort to counter China’s dominance in shipbuilding and logistics while reigniting domestic ship construction and port infrastructure investment. Starting in six months, Chinese operators will be charged $50 per net ton, with an annual increase of $30 for three years . Non-Chinese carriers using Chinese-built vessels will face lower rates, beginning at $18 per ton or $120 per container, with annual increases. The USTR capped fee applications at five voyages per vessel annually, scaling back its original, more punitive per-port-call proposal after intense industry pushback. The fees are tied to findings from a USTR investigation, which concluded that China’s shipbuilding dominance — producing 29% of global fleet capacity and 70% of all container ships on order — stemmed from unfair trade practices. Exemptions apply to ships arriving empty, those in the Great Lakes or U.S. territories, and some bulk exports. LNG vessel transport restrictions will phase in over 22 years to support U.S. production. China’s largest container carrier, Cosco Shipping Lines, has sharply criticized the USTR’s plan. In a strongly worded statement, Cosco labeled the move as “discriminatory,” and warned it would disrupt global industrial and supply chain stability. Cosco denied allegations from that USTR investigation that claimed China manipulated its shipping and shipbuilding sectors to gain an unfair advantage. The carrier said it upholds “integrity, transparency, and compliance” in global competition and remains committed to ensuring the resilience of international trade. Walmart Investing $6B in Mexico, Central America Store Expansion Walmart of Mexico and Central America will invest $6 billion to open new stores across the region , reinforcing its long-term commitment to growth in Latin America. The expansion will include Bodega Aurrera, Walmart Supercenters, Sam’s Club, and Walmart Express formats, building on a robust network of 3,200 stores across all 32 Mexican states. This latest move echoes Walmart’s earlier $1.3 billion investment in 2016 for regional distribution and operational upgrades. The retailer entered the Mexican market in 1991 with a Sam’s Club in Mexico City. In a statement, Walmart said the new expansion reflects confidence in the region’s economic potential and consumer demand. Globally, Walmart continues to invest aggressively in infrastructure and store development. The company has pledged about $4.5 billion for its Canadian operations and $1.3 billion in Chile to build 70 new stores and a distribution center. In the U.S., Walmart is executing a five-year plan to build or convert more than 150 stores while modernizing 650 existing locations under its “Store of the Future” initiative. Experience Seamless Shipping with Entourage Freight Solutions Entourage Freight Solutions believes in total transparency in the shipping process. That is why we invest in tech solutions that track every shipment extensively, monitor every driver, and extract every bit of efficiency without sacrificing quality. Our state-of-the-art platform utilizes cloud-based GPS tracking to keep you informed, reroutes shipments on the fly to avoid delays, and even responds to real-time market changes to ensure you receive your shipment on time and as soon as possible. Our Services Full Truck Load (FTL): When you need a truck all to yourself. Less-Than-Truckload (LTL): Efficient solutions for multi-stop shipments or combining smaller loads to save on costs. Refrigerated Trucking: Keeping your temperature-sensitive products fresh and safe. Cross-Docking: Strategically located facilities in Shelby, Ohio, Cedar Rapids, Iowa, and Romulus, Michigan, for streamlined consolidation, storage, and distribution. Ready to experience a new level of service and control in your freight shipping? Request a quote today to see how Entourage Freight Solutions can help with your freight movement and other supply chain needs.