A Letter from the President of National Shipping
As they say in horse racing, we are ‘heading down the stretch’ – the final quarter of 2024. The excitement of a close presidential election has gripped the public’s attention. The euphoria of sport allows us to be distracted from the serious crises that surround us. Ukraine, Gaza, the Red Sea, our southern border are quandaries that remain unresolved and are teetering on escalation rather than resolution.
The country is split right down the middle, as it has been for some time. The absence of the Teamsters’ endorsement for a Democratic candidate is evidence of the divisiveness that exists stateside.
Another traditional democrat supporter not endorsing either presidential candidate is the ILA. The International Longshoremen Association (ILA) strike seems inevitable on this first day of October. The union provides the labor that stevedores 43% of the USA’s container imports. The affected ports are from Maine to Texas. There is a stalemate in negotiations as the ILA is asking for more than a 32% wage increase over 6 years, amongst other demands such as enhanced benefits and anti-automation initiatives. The last ILA strike was in 1977 and lasted 44 days.
The trade between stateside and Puerto Rico will not be directly impacted as containers will still move to and from Puerto Rico as the local Puerto Rico ILA contract is outside the master agreement, which does not expire for another year. Also important to note is that in the past, the unions have stevedored US Flag vessels during work stoppages supporting the noncontiguous US states, territories, and possessions—another benefit of the US Flag.
Downline, the consequences of a new ILA 6-year contract will be felt in 2025. The results of the ILA contract negotiations will trickle down to the ILA contract that applies to Puerto Rico. The timing of this strike is key as it is an election year with candidates vying for votes. Meanwhile, the cargo ‘on the water’ will be frustrated, some being Christmas freight. One could say the union is in the ‘catbird seat.’
Luckily, so far, the weathermen were wrong about an active Atlantic hurricane season. To date, the hurricanes have concentrated in the US Gulf. This will give Puerto Rico another year to strengthen the electric grid and continue converting to renewable energy, mainly solar. In August, the duty on Chinese-manufactured solar panels increased from 25% to 50%. This will impact the Department of Energy’s renewable energy projects on the island as the grants are dollar-based.
Given today’s global freight rates, disruption of the supply chain, and punitive duties, we run the risk of rekindling another round of inflation, which could result in a reduction in consumption and lead to a recession.
Meanwhile, all eyes are on the elections. Puerto Rico and the stateside will have new leaders. Thanks to FEMA and DOE, many projects and initiatives are in place stabilizing the grid while installing renewable energy projects on the island to meet the 100% energy self-sufficiency goal of 2050.
Looking forward to 2025, the Farm Bill has expired and requires a new 5-year plan. For Puerto Rico, what is at stake is the possibility to convert from the NAP to SNAP (nutrition plans) status under the USDA program which would increase participation and monthly allowances. USDA sponsors the program formally known as the Food Stamp Act of 1964.
While the citizens of Puerto Rico are spared casting their vote in the presidential election, the race looks like it will be a photo finish. I found it amusing that even the Pope cast a recommendation.
The fourth quarter will be challenging and uncertain. At National Shipping, we remain focused on our commitment to the Puerto Rico trade. Our service level remains high, with 98% schedule integrity year to date. Providing direct calls at Houston and Port Everglades, we offer an alternative gateway port to and from Puerto Rico reducing the inland mileage for freight West of the Mississippi.
On behalf of National Shipping, we would like to thank you for your trust in our service and look forward to meeting your future needs. Thank you for being a valued customer.
Sincerely,
Torey Presti
President of National Shipping of America
