James Seramba’s Post

Next US administration will implement #tariffs (we don't know the scale yet). Theory and market consensus suggest that it will add inflationary pressures. I may have some doubt of significant inflationary pressure of such tariffs because, (1) it is imposed on imported goods prices that represent only a fraction of the price consumers pay, (2) it is weighing on #growth that is desinflationary, (3) it may trigger retaliationary tariffs from trading partners, this is also weighing on growth, hence desinflationary and finally (4) inflation is a dynamic measure while tariffs are a one of effect (i.e. it has effect when implemented and zero afterwards). The first point is probably the most important and we need to consider current price elasticity of consumers (i.e. how sensitive are they to price increase when making spending decisions). The episode of profit led inflation of 2022/2023 is clearly over, hence importers and middle men will have to bear part of the price of tariffs, if they don't want to see the volume of sales plummeting or even worse, losing market share. Then if we assume that the final price is split between labour force (maybe 25% of the price), margin (maybe 30%), other domestic charges such as rent or distribution costs (maybe 15%) and the price paid for import (maybe 30%), we see that hypothetical tariffs of 10% would only represent 3% of the price consumers pay. Therefore, retailers may accept a bite of their 30% margin to avoid losing clients and a 3% bite would cancel the effect of tariffs for consumers, resulting in about zero effect for #inflation. In conclusion we may look at the blip of inflation in 2018, after 2017 tariffs, followed by an inflation back to normal in 2019. Why would it be different in 2025 ? In conclusion I would still expect the #Fed to lower #interest rates as planned before the election results and recent move may be just noise and volatility.

There has been a great deal of talk about the huge tariff increases proposed by the incoming administration, and the overall effect that they may have on importers, consumers and the economy in general. Here's a brief two minute read on suggestions we recently sent out to all of our customers regarding the need to ship as early in Q1 as possible, if not sooner. https://conta.cc/3CzYMaF

The Great Freight Recession is officially over… Sorry, had to borrow that headline from the Freight Waves article everyone’s talking about. Now, if we look at what tariffs did last time, we saw that they ended up costing consumers a lot more than what the government generated. Remember the tariff on washing machines and dryers? That cost consumers an extra $1.5 billion per year. So, with tariffs in play again, it’s pretty likely that the cost to consumers will rise, which could push inflation even higher. The key indicator I think is critical for predicting where freight volumes are headed is the PMI (Purchasing Managers' Index). It gives us a pulse on the health of the manufacturing sector. Right now, PMI is still under 50, which signals contraction. This means the manufacturing sector is likely shrinking due to weaker consumer demand. Even looking at the New Orders sub-index , which basically tracks the volume of new orders , shows weak numbers too. This again points to lower consumer demand, which is something we can’t ignore. I get that there are a ton of other factors to consider, but until we see improvement in consumer demand , enough to push the PMI and new orders up, we can’t say we’re fully out of the woods just yet. We just have to wait and see what policies the Trump administration will bring to help improve that. Until then, it's a waiting game. #truckingindustry

Uncertainty isn't going away. But data can help you make more-informed decisions. There is plenty to consider for US importers in the coming months – not least the upcoming US election and potential for new tariffs on China imports. There is also the looming threat of further strike action at ports on the US East Coast and Gulf Coast in January, which can also have repercussions on the western seaboard. Considering your ocean freight shipping options is top of mind during times like this – when to sign the next long-term contract, which carrier to award it to given the alliance reshuffle in 2025, and how your strategy could be impacted by disruptions such as strikes, wars and tariffs. Should you focus on all corridors at once or concentrate on those which are used to ship the most essential supplies? Could an index-linked contract be the best option to provide a level of control during times of volatility so you can channel energy into working with your service provider on operational delivery? More and more shippers are coming round to this way of thinking. There are no easy answers to these questions and it will depend very much on individual circumstances and supply chain needs, but don’t just cross your fingers and hope for the best. Use Xeneta data to understand the relationship between long- and short-term market movement and offered capacity on your trades at a regional and port level, while also benchmarking carrier rates and service reliability. Perhaps the questions have never been tougher, but you have never had so much data to help you reach the right answer. https://lnkd.in/eQDQrXtU #marketmovements #supplychain #data

Use #Xeneta data to understand the relationship between long- and short-term market movement and offered capacity on your trades at a regional and port level, while also benchmarking carrier rates and service reliability. Perhaps the questions have never been tougher, but you have never had so much data to help you reach the right answer. #Xenetabylane #Xeneta

What happens now? Not a lot, but I know a lot of people in the supply chain are scrambling now because of the stated goals of the incoming administration. Things like increased tariffs and reshoring are all on the table now. Along with lingering issues like the Jan 15 ILA deadline will probably loom large over supply chains next year. If you're not having these conversations with your executive and (most importantly) financial teams then start today. There's more than enough information bouncing around Linkedin to have an informed outlook for next year. #Supplychain #logistics

Tariffs, gloom and doom? Tariff hikes could reshape supply chains in a big way, driving up costs for manufacturers and spiking freight rates. The changes aren’t set in stone yet, but now’s the time to get proactive. Here’s what industry experts are suggesting:  ▶️ Know your weak spots. Dig into your supply chain to uncover hidden tariff risks, even at the tier-two level. Surprises here could cost you big.  ▶️ Frontload imports—but tread carefully. Stock up on goods before tariffs hit. Just watch for spiking freight rates or time-sensitive items that could expire on the shelf.  ▶️ Think beyond China. Diversify your sourcing to stay nimble long-term. If you're too dependent on one region, it's time to rethink your strategy. Trade policies evolve, and so do opportunities to improve your supply chain. Staying informed and flexible is the best way to position your business for success. #tariffs #supplychainresilience #supplychainstrategy

With the holiday season in full swing, families may find some relief from rising costs. Yet, a potential economic storm could be on the horizon. In his op-ed, "Are Tariffs the New Inflation Trigger? What Consumers and Investors Should Know," Frank Holmes, CEO of U.S. Global Investors (NASDAQ:GROW), examines how proposed tariffs under President-elect Donald Trump could unleash a fresh wave of inflation, impacting consumers and investors alike. More at #Proactive #ProactiveInvestors http://ow.ly/q9A9105QVa3

Up to this month, general rate increases have been consistently supported by carriers with the market seeing a more than 150% surge in spot rates in certain major trades. However, a potential turning point occurred recently when not all lines supported the rate GRI. According to a Xeneta briefing note, initial data suggested a 2% rise in spot rates on the Far East to US West Coast trade, but new negotiations data showed a $50 per feu decrease since July 14. Despite these fluctuations, Xeneta warns of potential disruptions from industrial action in Europe and the US and the possible impact of a Trump election victory on tariffs and demand. #SpotRates #GlobalLogistics #MarketTrends https://lnkd.in/ggTfMxU4

Is There Another Round of Inflation on the Horizon? President-elect Trump’s promises of increased tariffs and mass deportations are set to reshape the U.S. economy, potentially leading to significant inflation. Economist Larry Summers has raised concerns, and this time, I agree with him. Tariffs: Higher tariffs on imports will likely lead to cost-push inflation, raising consumer prices as businesses pass on increased costs. Labor Market: Deporting undocumented workers could create labor shortages, driving up wages and contributing to wage-push inflation. Reflecting on the Federal Reserve’s past interest rate hikes, it’s clear that the nature of inflation matters. Previously, supply-side disruptions were the main drivers. Now, the president-elect’s policies are likely to introduce both cost-push and wage-push pressures, aligning with Summers’ warnings. In 2022 I thought that Summers was being overly dramatic without taking a deep look at the big picture. I was also disappointed that the only solution that the many great minds at the Federal Reserve could come up with was to increase interest rates. I think we can all agree that the supply chain disruptions that triggered inflation back then would eventually correct itself and prices would stabilize. The economic implications of the President-elect’s policies are multifaceted and significant. Increased tariffs are likely to raise consumer prices, while mass deportations could lead to labor shortages and higher wages. Together, these factors create a potent mix for inflation, validating Larry Summers’ concerns this time. As the U.S. navigates these changes, it will be crucial and prudent for policymakers to carefully consider the balance between protecting domestic industries and maintaining economic stability.