Industry Update – September, 2023

This week we discuss the impact of the UAW Strike, 2023 Golden Week Impact on Shipping and Panama Canal Drought.

Drought Conditions Impact Panama Canal

Vessel Restrictions Remain in Place 

The Panama Canal Authority announced the 2023 rainy season did not improve the ongoing drought. Therefore, current vessel restriction of 44 feet will remain in place for the next ten months. 

  • Next year even drier conditions are forecast which will further impact the Canal and continue to disrupt the flow of trade. If, as anticipated the dry season begins earlier next year, the Panama Canal could see near-record low water levels by April.
  • The Panama Canal Authority has also restricted the number of vessels transiting through the Panamax locks from the usual 23 slots to 14 slots – 10 large vessels and 4 regulars with premiums on heavier and larger ships. 

U.S. Market Update

2023 Golden Week September 29 – October 6 

The Journal of Commerce reports container volumes decreasing as the Golden Week holidays approach. Container volumes weaken and load factors are are trending down in spite of an increase in blank sailings. According to the September 14th article, after taking into account cancelled sailings, the number of actual actual sailings over the next five weeks is the lowest since February. 

Because of decreased sailings, the usual spike in demand that precedes Golden Week may not occur. A minor spike in volume is anticipated and Spot rates are expected to remain under some pressure.

One aspect of Golden Week that doesn’t change will be the impact of reduced staffing at origin. We recommend importers communicate now with origin suppliers to confirm their availability during Golden Week. Communicate with your Logistics partner now to ensure any support needed from origin is available.

Hurricane Season in the Atlantic

Upgraded Chance of Hurricane Activity for 2023

Each year hurricane season brings a threat of supply chain disruption. Due to the unpredictable nature of hurricane activity, we encourage shippers to keep a watchful eye on developing weather events. 

NOAA’s Climate Prediction Center—a division of the National Weather Service—has increased their prediction for the ongoing 2023 Atlantic hurricane season to an “above normal” level of activity from a “near normal” level with their most recent update. 

The outlook now includes a 70% chance of 14-21 named storms, of which 6-11 could become hurricanes, and 2-5 could become major hurricanes. The updated outlook also states that current conditions are likely to counterbalance the usually limiting atmospheric conditions associated with the ongoing El Niño event. 

Labor Disputes: UAW Walkout

On September 18, 2023 United Auto Workers entered their fourth day of strike action. Union members walked out when their contract expired on September 14th. The UAW represents 146,000 members. On the table for negotiation are a demand for a 46% increase in pay, 32-hour work week with 40 hours of pay.

As a result of the walkout Ford told 600 workers not to report to work at its Michigan Assembly Plant’s body construction department because the metal parts they make need to be coated promptly for protection and the paint shop is on strike. Additionally, General Motors warned that 2,000 workers are expected to be out of work at its Fairfax Assembly plant in Kansas this week. 

A prolonged strike (8 to 10 weeks) will have an impact on the automotive supply chain as suppliers who provide parts to assembly lines will then be faced with decisions. Laying off staff would be a difficult call, especially with a tight labor market.


Let’s Get You Going.

Contact Us

Related Articles

  • Announcing a LOGISTEED Warehouse in Thailand

    Our new warehouse will open in the Bangna area and will feature: • Dry storage available December 2024• Chilled and frozen storage available January 2025 204/59 Moo 1, Soi Klang,…

    Read More
  • LOGISTEED America Chicago CFS Bonded Warehouse
    In the Spotlight: Our Chicago CFS Warehouse

    Take control of your cargo from start to finish and discover the benefits of our strategically located, US Customs bonded CFS facility. What is a CFS Warehouse and How Can…

    Read More
  • Industry Update – January 2024

    Spot Rates and Fees Set to Climb as Carriers Respond to Panama Canal and Suez Disruption Disruption in the Red Sea and Suez Canal remains a problem causing supply chain…

    Read More