2025 has arrived, and, as expected, it brings a number of logistics challenges and uncertainties.
The potential ILA labor strike that would close all US East and Gulf Coast ports looms large, with the current tentative agreement expiring January 15. The two sides are scheduled to restart their negotiations Tuesday, January 7, in hopes of finding common ground before the mid-January deadline. In the meantime, the industry is bracing for a strike that could stop port operations coast-wide for an extended period.
Ocean freight rates are up ahead of the potential labor disruption, and carriers have announced surcharges that go into effect as early as January 10; these surcharges cover the potential strike, congestion, and disruption that may occur as a result of a work stoppage. All ocean freight cargos moving via US East and Gulf Coast ports will be subject to these surcharges if they go into effect as planned, with surcharge amounts ranging between $1000 and $3000 per FEU.
The market is also bracing for potential new import tariffs after the US presidential inauguration this month. The Lunar New Year holiday begins this month as well, shutting down factories across China and other Asian countries, a period that is typically followed by blank sailings and the traditional slack season. Shippers and carriers are looking ahead to ocean contracting season, which also begins during Q1. Carriers will be aiming to keep freight rates elevated while shippers hope any disruptions are cleared quickly to allow rates to settle ahead of negotiations.
While carriers are implementing new alliances and rolling out new and refreshed service strings, forecasting remains as critical as ever. Carriers work to manage supply against demand and, therefore, need insight from shippers on volume needs well in advance. Shippers are advised to keep their logistics partners posted on shipping plans and forecasts as early as possible.
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Your CVI team is here to assist you through these current market challenges. Ocean freight, air freight, domestic road/rail, and Customs Compliance – count on our dedicated professionals to care for you and your supply chain. Call us and let us show you what we can do!
Rachel Shames
VP, Pricing & Procurement
CV International, Inc.