New Year on the Water
2024 was not a good year for CE companies that are required to ship product by container, with conflicts in the Red Sea and strike threats on the East and Gulf coasts pushing up rates throughout most of the year. In fact the Global Container Freight Index rose 96.9% during 2024, while the Asia to US East Coast index rose 86.4%. The global index finished the year down 31.5% from its high but up 85.6% from its low, while the China/East index closed down 40.4% from its high and up 89.5% from its low.
The good news is that the ILA strike that was scheduled for January 15, which would have shut down ports on both the East coast and the Gulf coast, did not happen, as a last-minute agreement between the ILA and the USMX was reached. The rank-and-file vote still has to occur, but if ratified it will settle the dispute with a 6-year contract that seems to have satisfied both sides. As the wage issue had already been settled, the only issue remaining was worker job protection from the automation that the USMX wants to bring in to modernize the ports, which was settled.
With the potential strike settlement and a less frenetic Red Sea situation, one might have expected rates to decline, however Chinese New Year (1/29) comes early this year and demand for containers has increased as the holiday approaches. In the first two weeks of 2025 the Global index rose 12.7%, while the China/West Coast index rose 22.8%, a bit more of a burden for CE company margins. To put those numbers in perspective, the 2025 Global index is up 64.1% on a y/y basis, while the 2025 China index is up128.9% y/y. Not an auspicious start to the year but at least the strike threat is out of the way.
The good news is that the ILA strike that was scheduled for January 15, which would have shut down ports on both the East coast and the Gulf coast, did not happen, as a last-minute agreement between the ILA and the USMX was reached. The rank-and-file vote still has to occur, but if ratified it will settle the dispute with a 6-year contract that seems to have satisfied both sides. As the wage issue had already been settled, the only issue remaining was worker job protection from the automation that the USMX wants to bring in to modernize the ports, which was settled.
With the potential strike settlement and a less frenetic Red Sea situation, one might have expected rates to decline, however Chinese New Year (1/29) comes early this year and demand for containers has increased as the holiday approaches. In the first two weeks of 2025 the Global index rose 12.7%, while the China/West Coast index rose 22.8%, a bit more of a burden for CE company margins. To put those numbers in perspective, the 2025 Global index is up 64.1% on a y/y basis, while the 2025 China index is up128.9% y/y. Not an auspicious start to the year but at least the strike threat is out of the way.
Figure 5 - Global Container Freight Index - 4/23 - 2025 YTD - Source: SCMR LLC, Freightos
Figure 6 – China – East Coast Container Freight Index - 4/23 - 2025 YTD - Source: SCMR LLC, Freightos
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