(Singapore, 10 Jan 25)The impending strikes that threatened to shut down key ports along the US East Coast and Gulf Coast from Maine to Texas have been called off following a breakthrough in negotiations. The International Longshoremen’s Association (ILA), representing port workers, and the US Maritime Alliance (USMX), reached a tentative six-year master contract agreement, averting what could have been a significant economic and supply chain disruption.
Before the agreement, port activity was under intense scrutiny, with average spot rates from the Far East to the US East Coast having increased by 26% since December 14, according to data from Xeneta, an ocean and air freight intelligence platform. The rates had climbed to USD 6,800 per FEU (40-foot equivalent unit), with potential surcharges of up to USD 3,000 per FEU looming if the strike had proceeded.
Emily Stausbøll, a Senior Shipping Analyst at Xeneta, welcomed the agreement, noting that “a strike had the potential to be a supply chain and economic disaster.” She highlighted the ongoing challenges shippers face in managing supply chain risks amidst such high levels of market uncertainty.
With the strike now off the table, Stausbøll anticipates a potential softening of spot rate growth on trades into the US from the Far East. This change could provide a more favorable environment for shippers negotiating new long-term contracts. Despite the positive outlook, she cautioned that the market remains volatile. The ongoing conflict in the Red Sea and the potential escalation of the US-China trade war, especially with Donald Trump’s return to the White House, could again push freight rates upward.
With over 500 million contracted container and air freight rates, Xeneta provides insights into both short and long-term market trends, essential for making informed decisions in a fluctuating market. As global market dynamics continue to evolve, the shipping industry faces a cautious path forward in 2025. Stakeholders are advised to stay vigilant and prepare for any sudden shifts that could impact freight costs and supply chain stability.
