The looming threat of strikes across ports on the US East Coast and Gulf Coast, which could have caused widespread economic disruption and supply chain chaos, has been successfully averted. A tentative agreement on a new six-year master contract has been reached between the International Longshoremen’s Association (ILA) and the US Maritime Alliance (USMX), preventing the closure of ports stretching from Maine to Texas.
The strikes, originally set to begin on January 15, had already triggered significant volatility in ocean container freight rates. According to Xeneta, an ocean and air freight intelligence platform, spot rates for shipments from the Far East to the US East Coast surged by 26% since mid-December, reaching an average of $6,800 per FEU (40-foot container). Carriers had also been preparing to impose disruption surcharges of up to $3,000 per FEU, which would have further strained shippers.
Emily Stausbøll, Senior Shipping Analyst at Xeneta, expressed relief over the agreement:
“This resolution must be welcomed, as a strike would have been a supply chain and economic disaster. However, it underscores the ongoing challenges shippers face in managing supply chain risks.”
With the agreement in place, spot rate growth is now expected to slow or even reverse, providing some relief for shippers negotiating long-term contracts. However, Stausbøll warned that risks remain: “While spot rates may decline in the short term, shippers must remain vigilant, as disruptions can quickly drive rates back up.”
The freight market outlook for 2025 appears mixed. While falling spot rates from the Far East to North Europe in January signal a weakening global market, geopolitical tensions and economic uncertainties pose significant risks.
Stausbøll highlighted concerns about the broader supply chain landscape: “The return of Trump to the White House could escalate the US-China trade war, and the ongoing conflict in the Red Sea adds to the unpredictability. Even with easing freight rates, the stakes remain high for shippers navigating these volatile conditions.”
The resolution of the US port strike threat brings short-term relief to shippers, with spot rates likely to stabilize or fall. However, with geopolitical tensions and economic challenges looming, shippers must remain proactive in managing risks and securing resilient supply chains for the year ahead.
