On the eve of the implementation of the new tariffs, the import volume of US containers surged sharply
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He also stated that although throughput has continued to increase for seven consecutive months, overall port transportation delays have not significantly worsened.
Union members vote to approve ILA master contract
The International Longshore Association and the American Maritime Exchange have respectively approved the temporary contract agreement reached on January 8th for dockworkers at ports along the US East Coast and Gulf Coast. After taking these measures, the contract will be submitted to ordinary workers in the next two weeks, followed by a vote on February 25th.
Harold Daggart, President of the International Labour Association, said in his speech, "I believe this is the best contract of the International Labour Association, and also the best contract negotiated by the Labour Organization
03 Countdown to the sharp drop in red ocean freight rates?
The head of the Suez Canal stated that he expects ship traffic through the Middle East waterway to gradually return to normal in late March and fully resume by the middle of this year. The prediction depends on the ceasefire between Israel and Hamas.According to Sea Intelligence, a maritime analysis agency, if the Red Sea route is reopened, container shipping rates are likely to decrease by 60% to 70% within six months. From 2024 to 2025, new ships will be delivered in a concentrated manner, resulting in a significant year-on-year increase in global shipping capacity. MSC will add 600000 TEUs of shipping capacity by 2025. In 2024, due to the Red Sea crisis and tariff concerns, importers stockpiled goods ahead of schedule, which exceeded some demand. The inventory replenishment cycle ends in 2025, coupled with cross-border trade.
The growth rate of demand in emerging markets such as e-commerce has slowed down, freight demand has fallen, and there is an oversupply of transportation capacity. At the beginning of 2025, Maersk and MSC were the first to launch a price war on the Asia Europe route, offering prices as low as $4000/FEU and $3840/FEU respectively, triggering other shipping companies to follow suit and leading to a decrease in freight rates.
04 What will happen to the negotiation of the new contract for the 04 trans Pacific route?
According to media reports, negotiations for the 2025-26 trans Pacific route contract have begun, with initial carrier quotes significantly increasing by about 25% compared to the current contract. The quote for the West Coast route is $2500/FEU, while the quote for the East Coast route is $3500/FEU.From the perspective of negotiation background, in terms of transportation capacity, the global container ship delivery volume is expected to reach 2.8 million TEUs in 2024, an increase of 65%. The hidden concern of overcapacity has emerged, but the diversion caused by the Red Sea crisis has temporarily eased this problem. At the cost level, fuel costs, detour surcharges, and environmental regulations have pushed up operating costs and compressed the space for negotiated prices among carriers. In addition, the possible new tariff policies introduced by the Trump administration may trigger importers to "rush to ship" and boost demand in the short term.
Market predictions suggest that if the Red Sea route is restored and tariff policies are implemented, freight rates may plummet, and West Coast contract prices may fall below $2000/FEU. Whether the carrier's demand for "cost compensation" can be realized depends on the balance between geopolitical and economic situations, and the final result may be announced before the new contract takes effect on May 1st.
05 POLA signs expansion contract, dock railway upgrade is imminent
On February 27, 2025, the Port of Los Angeles signed a contract to expand the railway yard at Pier 300 by 2027.
The project will add five new railway tracks, with an expected increase in cargo handling capacity of 520000 TEUs per year. These newly added tracks will effectively improve the railway transportation efficiency of the port, reduce the dwell time of goods in the port, and increase the overall logistics turnover rate.
The project is expected to gradually advance in the coming years, during which it will have a certain impact on the operation of the port. The Los Angeles Port Authority stated that it will work closely with relevant companies to develop detailed transition plans and minimize disruptions to the daily operations of the port.
By enhancing the connectivity between railways and maritime transportation, ports will be able to better serve inland markets, promote the rapid flow of goods, and facilitate trade between regions.
