The Red Sea: Go Dark and Go Now?

In this week’s Roar: Pushing for the resumption of shipping in the Red Sea, the ILA and USMX are back at it, a potential limiter to air capacity, the November PMI, and events that shaped the industry in 2024.

The EU’s naval commander is pushing for shipping activity to resume in the Red Sea, saying that under Operation Aspides—and with proper risk management—it would be possible for 15% of ships to return immediately. Part of his argument is that rerouting away from the region undermines the maritime industry’s resilience, adding that coordinated international efforts are needed to maintain secure shipping lanes. One of his recommendations is to transit at night with the Automatic Identification Systems turned off, hindering visual targeting.

In a story that still demands attention, the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) are back at it—fighting over a new contract for East and Gulf Coast ports. Things remain at a standstill as the ILA, which opposes job-replacing technology, halted negotiations, accusing USMX of trying to force automation technology language into the contract. The USMX’s stance is that modernization is necessary to remain competitive and efficient. The January deadline for the resumption of the strike still looms and is ticking closer.

US air traffic control (ATC) restrictions due to a shortage of controllers are impacting aviation expansion. With air cargo demand (and rates) already elevated, there is fear of a long term impact on air freight capacity. Most impacted right now are commercial flights, but off-peak takeoffs and landings of passenger planes affect carriers’ freighters which are generally given lower priority. United CEO Scott Kirby isn’t expecting a speedy fix, predicting years-long controller scarcity at a recent industry event.

The US manufacturing Purchasing Managers’ Index (PMI) for November 2024 shows near stabilization following months of contraction, registering 48.4%. Some factors include improved demand, with new orders reaching 50.4%, and companies hiring more staff, pushing employment up 3.7%. Production is also up slightly at 46.8%. Overall, manufacturers seem positive, despite the potential for increased tariffs causing uncertainty in the industry.

With 2024 almost behind us, let’s look at some events that shaped the year. The Baltimore Bridge collapse highlighted labor challenges and the vulnerability of the supply chain’s infrastructure. Amazon’s expansion into air cargo and UPS’s USPS contract made everyone aware of the growing influence that e-commerce giants have on the industry. And issues like the Red Sea crisis and the impact of potential tariff increases have emphasized the need for resilience and diversification within the supply chain.

For the rest of the week’s top shipping news, check out the article highlights below.