2024-09-25 11:38

Companies import early, shift goods to West Coast, use pricey flights to avoid strike ILA union and US Maritime Alliance at impasse over pay, risking supply chain disruptions Economists estimate strikes could reduce payrolls growth by 100,000 jobs if prolonged LOS ANGELES/NEW YORK, Sept 25 (Reuters) - U.S. companies that rely on East and Gulf Coast seaports have been importing early, shifting goods to the West Coast, and even putting cargo on pricey flights to hedge against a threatened Oct. 1 strike that could jam supply chains and reignite inflation ahead of the U.S. presidential election. "This is just another headache after everything else we've been dealing with," said Kenneth Sanchez, CEO of Chesapeake Specialty Products, which sends goods like metallic abrasives and foundry sand additives used to make engine blocks and transmissions to customers around the world. His main port is in Baltimore, one of three dozen covered by an expiring contract between the International Longshoremen's Association (ILA) union representing 45,000 port workers and the United States Maritime Alliance employer group, whose renewal talks are at an impasse over pay. The threatened walkout would come just five weeks before a presidential election between Democratic Vice President Kamala Harris and Republican former President Donald Trump that is likely to turn on pocketbook issues. A prolonged strike, alongside an ongoing strike by 30,000 machinists at Boeing that has already started to ripple through the aircraft maker's supplier network, could put a dent in the U.S. job market next month at a critical moment. Economists at Oxford Economics last week estimated the two labor actions could reduce payrolls growth by 100,000 jobs if they stretch into mid-October. For Sanchez, it would be the second big supply chain setback after a bridge collapse cut off most access to the Baltimore port from late March through mid-June. "Things were just starting to get back to normal," he said. Now, he is working on a plan to put shipments on trains to West Coast ports - should the ILA's members go on a prolonged strike at ports that stretch from Maine to Texas and handle about half of U.S. ocean trade. German chain saw manufacturer STIHL said it is also developing contingency plans to keep exports flowing from its factory near the Port of Virginia, but didn't elaborate. STIHL's U.S. plant ships products to over 80 countries. Retailers, manufacturers and other importers, meanwhile, have been rushing in apparel, home goods, machine parts and other items ahead of the strike deadline to avoid having cargo stuck. That sent U.S. imports to multi-year highs in July and August - exacerbating a shipping price increase tied to rerouting vessels around Africa to avoid rebel attacks on ships near the key Suez Canal trade shortcut. Ronnie Robinson, chief supply chain officer at DSW parent company Designer Brands (DBI.N) , opens new tab, normally routes about 20% of the company's shoe imports through the East Coast. He shifted about half of those goods to the West Coast. And, he paid ten times more than a typical ocean transit to fly in a small shipment of leather boots and dress shoes from Brazil. "People are paying whatever they can to make sure they're in the front of the queue," said Robinson, who added his company cannot risk late deliveries to clients like Macy's (M.N) , opens new tab, Nordstrom (JWN.N) , opens new tab and Dillard's (DDS.N) , opens new tab department stores. Still, Robinson has 10,000 to 20,000 units in transit via East Coast-bound ships "that we're worried about". STRANDED CARGO, SOARING RATES As of Saturday, there were 42 container ships scheduled to arrive at the Port of New York and New Jersey, one of the biggest ports involved in the labor dispute, according to S&P Global's maritime tracking service Sea-web. Thirteen of the ships are scheduled to arrive after Sept. 30. In August, the five largest ports on the East and Gulf Coasts processed about 24,766 40-foot containers of imports and exports valued at $2.7 billion each day, according to John McCown, senior fellow at the Center for Maritime Strategy. Incoming wine and auto parts from Europe are vulnerable. Rerouting those goods to the West Coast is challenging because it could require difficult-to find transit through the Panama Canal, air freight or other time-consuming or costly measures, logistics experts said. Ports on the East and Gulf Coasts also handle roughly 75% of the bananas that enter the United States, according to Jason Miller, interim chair of Michigan State University's department of supply chain management. He added that it doesn't make financial sense to reroute or fly in such low-value perishables. The cost to send a 40-foot container from Shanghai to New York jumped to around $10,000 in July. Rates have since retreated, but could spike again with a strike. "If the cost of shipping goes up ... it gets pushed onto the end consumer - whether that's someone buying a car or someone buying a metal part in a hardware store," Chesapeake's Sanchez said. Sign up here. https://www.reuters.com/markets/us/shippers-scramble-workarounds-ahead-threatened-us-port-strike-2024-09-25/

2024-09-25 11:16

TSX ends down 0.2% at 23,905.88 Posts first decline in five sessions Energy falls 1.8%; oil settles 2.6% lower Lightspeed jumps 13.3% as company explores options Sept 25 (Reuters) - Canada's main stock index ended lower on Wednesday as a drop in oil prices weighed on energy shares and investors took stock of recent gains for the index that had lifted it to an all-time high. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) , opens new tab ended down 46.34 points, or 0.2%, at 23,905.88, after four straight days of gains. On Tuesday, the TSX posted a record closing high as China's stimulus package boosted investor sentiment globally. "I don't think there is anything to be read into this tape. It is just a tape that's taking a breather and a bit more of a defensive tone," said Christine Tan, a portfolio manager at SLGI Asset Management Inc. U.S. benchmark the S&P 500 also edged lower as investors awaited further economic indicators and signals on upcoming interest rate cuts. The Federal Reserve and the Bank of Canada have begun easing campaigns. "Now that rates are starting to come down, I think investors are starting to think about the sectors that have lagged, sectors that are more economically sensitive," Tan said. "Usually when central banks start to cut rates, at some point the economy starts to bottom out and starts to recover." The energy sector fell 1.8% as the price of oil settled 2.6% lower at $69.69 a barrel on easing worries over supply disruptions in Libya. Consumer discretionary fell 1.2%, weighed by a decline of 5.5% for the shares of Magna International (MG.TO) , opens new tab after Morgan Stanley downgraded the stock to "equal-weight" from "overweight". Industrials also lost ground, falling 0.6%. Lightspeed Commerce Inc (LSPD.TO) , opens new tab was a bright spot. Shares of the payments software maker jumped 13.3% after sources told Reuters that the company is working with a financial adviser to explore options, including a potential sale. Sign up here. https://www.reuters.com/markets/tsx-futures-fall-china-stimulus-led-optimism-fades-2024-09-25/

2024-09-25 11:05

TOKYO, Sept 25 (Reuters) - Taiwan has eased restrictions on food imports from Japan that were introduced following a nuclear accident at the Fukushima nuclear power plant in 2011, Japan's agriculture ministry said on Wednesday. Taiwan has lifted an import ban on wild game meat, mushrooms and wild vegetables called Koshiabura from Fukushima and four nearby prefectures, providing proper documents on radiation tests and the origin of the products are submitted. Last week, Tokyo reached an agreement with Beijing over the discharge of wastewater from the wrecked plant, paving the way for a restart of seafood shipments from Japan to China. Sign up here. https://www.reuters.com/markets/asia/taiwan-eases-restrictions-japanese-food-imports-imposed-over-fukushima-2024-09-25/

2024-09-25 10:57

MUMBAI, Sept 25 (Reuters) - The Indian rupee rose on Wednesday tracking most of its regional peers which were boosted by a rally in the Chinese yuan, while dollar sales from state-run banks also helped the local currency. The rupee ended at 83.5925 against the U.S. dollar, compared to its previous close at 83.67. The currency rose to as high as 83.5150 during the day, but trimmed its gains as the dollar index firmed in the latter half of the session. The yuan rose above 7 per dollar for the first time since May 2023, lifted by investor optimism a day after broad policy easing measures were announced to shore up the country's flailing economy. State-run banks were "on the selling side (on USD/INR)," while near-term sentiment on the local currency is also positive, a foreign exchange trader at a private bank said. Other Asian currencies were mostly higher, led by the Indonesian rupiah and Malaysian ringgit, which were up 0.5% each. "If USD/CNH breaks with momentum below 7.00, we think it would be broadly supportive of global EM currencies and help tilt the dollar lower," ING Bank said in a note. The dollar index has been on the backfoot amid rising wagers on another 50 basis points rate cut by the Federal Reserve in November. Interest rate futures are currently pricing in a 61% chance of the Fed delivering a 50 bps cut, compared to 53% a day earlier, according to CME's FedWatch tool. Remarks from Fed policymakers are in focus this week with Chair Jerome Powell slated to speak on Thursday alongside a slew of other officials. Sign up here. https://www.reuters.com/markets/currencies/rupee-ends-higher-uptick-asia-fx-state-run-banks-dollar-sales-help-2024-09-25/

2024-09-25 10:44

MILAN, Sept 25 (Reuters) - The chief executive of Italian energy group Eni (ENI.MI) , opens new tab expects Brent oil prices to recover to around $80 per barrel in the coming months. "Oil (is seen) at around $80 per barrel, while for natural gas in Italy we can (expect a price of) 30 euros per megawatt hour," Claudio Descalzi said on the sidelines of an energy conference organised by financial daily Il Sole 24 Ore on Wednesday. Brent is currently trading around $75 per barrel while the benchmark front-month contract for natural gas at the Dutch TTF hub is currently at 36.50 euros per megawatt hour (MWh), LSEG data showed. Descalzi also said the European Union is in danger due to its economy becoming less competitive and an excessive specialisation in services at the expense of the industrial sector. He called for European institutions to become more pragmatic and engage with industrial players to agree on the energy transition path. Descalzi added that the European automotive industry does not seem ready to cope with a planned 2035 ban for combustion engine cars. Sign up here. https://www.reuters.com/business/energy/eni-ceo-sees-brent-oil-price-around-80-per-barrel-q4-2024-09-25/

2024-09-25 10:30

WARSAW, Sept 25 (Reuters) - Discussion about rate cuts in Poland could start in March at the earliest, central banker Iwona Duda told the Money.pl website in comments published on Wednesday. Poland's main interest rate has been on hold at 5.75% since October 2023 amid uncertainty over the inflation outlook created in part by question marks over government policy on energy prices. "We need confirmation from incoming data that inflation will show a tendency to permanently decline towards the target," Duda was quoted as saying. "In my opinion, the discussion on interest rate cuts will be able to start in March at the earliest." The central bank publishes its next set of economic forecasts in March. "It is difficult to talk about interest rate cuts when we are again in an environment of rising inflation," Duda said. "It seems that the peak of inflation - even around 6% - will fall in March or April 2025." Sign up here. https://www.reuters.com/business/finance/polish-cbanker-duda-says-discussion-about-rate-cuts-may-start-march-2024-09-25/