The Cold Chain Solutions Newsletter January 2025

January 31, 2025

Frozen and Refrigerated Cold Chain Insights

Welcome to The Cold Front, presented by RLS Logistics, the Cold Chain Experts! We proudly offer nationwide cold storage warehousing, ltl shippingtruckload freight brokerage, and eCommerce fulfillment cold chain solutions. This month’s edition focuses on these topics for our January 2025 issue: Port Strike Averted, Tariffs Under New Administration, and The Panama Canal’s Impact on U.S. Trade. The Cold Front is a monthly summary highlighting pertinent cold chain storage market data in one concise location. These insights ensure that you have the data to make better decisions to fuel your growth. We hope you find this information useful! If you want data on your specific market, click the button below.

Port Strike Averted

The 2025 supply chain landscape began positively with successfully resolving the automation conflict between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX). This agreement reached just before the January 15 deadline, averts a potential strike that could have significantly disrupted operations across East and Gulf Coast ports. The core of the dispute centered on integrating automation in port operations.

The USMX advocated adopting semi-automated cranes and other technologies to enhance efficiency and competitiveness. Conversely, the ILA expressed concerns that such automation could lead to substantial job losses, threatening the livelihoods of dockworkers. This tension reflects a broader national debate on balancing technological advancement with job preservation. The tentative six-year contract agreement that emerged from subsequent negotiations aims to protect union jobs while permitting ports to modernize with new technology.

Notably, the deal avoids full automation, instead opting for a phased approach to modernization. As part of this strategy, new workers will be hired to complement technological advancements, ensuring that human labor remains integral to port operations. This resolution not only safeguards the interests of dockworkers but also ensures U.S. ports’ continued efficiency and competitiveness. By addressing both the need for modernization and the preservation of jobs, the agreement sets a precedent for how labor and management can collaboratively navigate the challenges posed by technological advancements in the supply chain industry.

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Trade Tariffs Under The New Administration

The Trump administration’s stance on import tariffs, particularly those targeting goods from China, has sparked ongoing debate about their impact on inflation and the broader economy. The tariffs, intended to protect domestic industries and reduce the trade deficit, have had complex and sometimes contradictory effects.

Two main perspectives have emerged in evaluating their role in today’s inflationary environment.  On one side, proponents argue that tariffs create opportunities for domestic industries by leveling the playing field and encouraging the production of goods within the United States. They contend that by reducing dependence on cheaper imports, tariffs can bolster local manufacturing, create jobs, and strengthen supply chains. This camp sees tariffs as a long-term investment in economic independence, particularly in key sectors such as steel, agriculture, and technology. They also highlight that a shift to domestic production could reduce exposure to international disruptions, such as during the pandemic. 

On the other hand, many economists and academics assert that tariffs contribute to inflation by raising the cost of imported goods, which are then passed on to consumers through higher prices. For businesses relying on imported materials, tariffs increase production costs, making goods more expensive and less competitive globally. This school of thought emphasizes that tariffs function as a tax on trade, shrinking consumer purchasing power and exacerbating inflationary pressures in an already strained economy.

Furthermore, retaliatory tariffs from trade partners can disrupt exports, compounding the economic impact.  Both perspectives underline the nuanced relationship between trade policy and inflation. While tariffs may foster domestic growth in specific industries, they also risk amplifying inflationary challenges in the short to medium term. For businesses navigating this landscape, including those in food logistics, understanding these dynamics is crucial to managing costs and maintaining competitiveness in a complex global market.

The Panama Canal and U.S. National Security

The fourth quarter brings annual holiday supply chain surges as retailers and logistics providers race to meet heightened consumer demand. This period often strains transportation networks, warehousing, and inventory management, with temperature-controlled goods like holiday meats and specialty foods adding additional complexity. This year, the usual Q4 pressures are compounded by the looming threat of a port strike, which could significantly disrupt the flow of goods through critical shipping hubs. A strike would delay shipments and create bottlenecks across domestic and global supply chains, amplifying costs and delivery challenges.

Adding to the uncertainty is the potential impact of a new administration’s stance on trade tariffs. If tariffs are maintained or expanded, businesses may face increased costs for imported goods, typically in high demand during the holidays. These combined factors, seasonal surges, labor disputes, and tariff policies, create a perfect storm for supply chain disruptions. Manufacturers and importers must remain agile, with contingency plans to mitigate risks and ensure that holiday inventories arrive on time and are in the stores when needed.