Container Freight Rates Poised to Drop as US Strike Averted: Report

With strikes at ports along the US East and Gulf Coasts currently called off, ocean container freight rates are anticipated to fall. File Image / Pixabay

The container market may be about to see a drop in freight rates in relief at the prospect of a widespread port strike in the US being averted.

The International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX) announced on Wednesday a tentative agreement on a new six-year master contract, averting the January 15 strike that could have severely disrupted operations at US East and Gulf Coast ports.

Average spot rates from the Far East to the US East Coast had already risen by 26% since December 14 and were expected to climb further if the strikes had proceeded, according to a report from freight intelligence platform Xeneta.

“We have seen average spot rates on the trade from the Far East to US East Coast spike 26% since mid-December to stand at USD 6 800 per FEU (40ft container), with carriers poised to add further disruption surcharges up to USD 3 000 per FEU should the strike have gone ahead,” Emily Stausbøll, senior shipping analyst at Xeneta, said in the report.

Stausbøll anticipates that spot rates may now start to decline, but shippers could remain exposed to potential supply chain disruptions in 2025.

“Looking ahead, it is likely spot rate growth will now soften on trades into the US from the Far East, suggesting a brighter outlook for shippers negotiating new long-term contracts.

Shippers should still stay alert, as freight rates could spike again with the ongoing Red Sea conflict and President Trump's return potentially reigniting the US-China trade war, she concludes.