Maritime

2025 Annual Review & Outlook

Spot volatility , slower volume growth to weigh on trans-Pacific contract rates

By Bill Mongelluzzo

A look back : Midsize US importers signed 2024-25 service contracts , most of which will expire on May 1 , with rates of about $ 1,500 to $ 1,700 per FEU from Asia to the US West Coast and about $ 1,000 per FEU higher to the East Coast . At the time of those negotiations , average spot rates were about $ 2,820 per FEU to the West Coast and $ 3,340 per FEU to the East Coast , according to Platts , a sister product of the Journal of Commerce within S & P Global . However , short-term pricing was extremely volatile in 2024 , peaking at $ 8,100 per FEU to the West Coast and $ 10,100 per FEU to the East Coast in July , before dropping to $ 3,000 per FEU to the West Coast and $ 4,600 per FEU to the East Coast by mid-November , according to Platts . As the year came to an end , spot rates in mid-December jumped back up to $ 3,700 per FEU to the West Coast $ 5,500 per FEU to the East Coast . Spot rates , also known as freight all kinds ( FAK ) rates for forwarders , were kept elevated this past year due to strong , sustained demand for US imports from Asia .

A look ahead : Carriers in late December launched preliminary negotiations with the largest big-box retailers for the 2025-26 service contracts that generally run from May 1 through April 30 , 2026 . This timeline is in line with contract negotiations in past years . The big-box retailers normally wrap up their contracts by late February , with midsize and smaller retailers following in March and April and nonvessel-operating common carriers ( NVOs ) concluding their agreements in April and early May . Initially , the big-box retailers are focusing on the new carrier alliances taking effect in February to ensure that their core carriers are able to offer them the capacity and port-pair coverages they will need in 2025 . If not , the largest importers will have to negotiate with other carriers and NVOs to fill out their schedules going forward . The largest retailers still intend to wrap up pricing in their 2025-26 contracts in February .

Trans-Pacific spot rates climbing from late-November lows

Container spot rates from North Asia to US West and East coasts , in USD per FEU

USD per FEU

$ 11,559 $ 10,000

$ 8,000

$ $ 10,000 6,000

$ 4,000

$ 2,000

Source : Platts , S & P Global

North Asia to US East Coast

The big picture : Shippers and carriers in the eastbound trans-Pacific are entering negotiations for their 2025-26 service contracts facing unusually volatile conditions . Spot rates , which normally have an impact on the spring negotiations , remain higher than in past years . But this year , the spot market may have less impact on contract negotiations than external factors , including stretched vessel capacity thanks to ongoing the Red Sea crisis , the likelihood of punishing US tariffs on Chinese goods and the restructured carrier alliances launching Feb 1 .

The next inflection : Retailers are seeking greater clarity on potential new and increased tariffs , which should emerge shortly after President-elect Donald Trump takes office , and in plenty of time to gauge the impact on prices and consumer demand for the second half of 2025 . This will allow retailers to plan their product sourcing before they wrap up service contract negotiations . Given that import growth is expected to fall far short of the 17 % seen in the first 11 months of 2024 and trans-Pacific capacity continues to grow , carriers this spring will be hard pressed to significantly increase service contract rates over 2024-25 levels , if they achieve any increase at all .

email : bill . mongelluzzo @ spglobal . com

Jul North Asia to US West Coast

© 2024 S & P Global

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Last year , Asia- USWC contract rates for midsize shippers were approximately $ 1,500 to $ 1,700 per FEU . Daniel Wright98 / Shutterstock . com

22 Journal of Commerce | January 6 , 2025 www . joc . com