Just like the old adage “the more things change, the more they stay the same,” it looks like the uncertainty of 2024 will continue well into 2025 – and feature many of the same issues affecting the industry.
The past year began with Yemen’s Houthi rebels launching missiles at shipping vessels bound for the Suez Canal. 2024 also saw the first U.S. East and Gulf Coast port strike since 1977, a series of record-breaking hurricanes that wreaked havoc at many U.S. ports, critical infrastructure collapses around the globe, growing global conflicts, increased tariffs, and the creation of new carrier alliances.
Looking ahead to 2025, many industry insiders expect carriers to continue routing their vessels around the Cape of Good Hope, extending the capacity crunch. Additionally, the specter of the U.S. government increasing tariffs looms large over 2025. The incoming administration has, according to CNBC, promised to increase tariffs on Chinese, Mexican, and Canadian goods as a way to curb illegal immigration and an unlawful drug trade.
This is in addition to the 10% to 20% duty on all imports and a 60% or higher tariff on Chinese imports that the incoming administration has promised it will assess. Also, all of the issues that affected the industry during 2024 will most likely remain throughout 2025.
“One of the main problems shippers will have to grapple with in the new year is determining what the cumulative cost of Red Sea diversions, tariffs, global conflicts, and new alliances will add up to, and how they can work around them in order to keep their businesses economically viable,” said OEC Group North American President Anthony Fullbrook. “For many shippers, the most prudent thing to do is plan ahead and ship as much cargo as possible in the first half of the year. Then, work with a logistics consultant to assess the market and create a more economically sound supply chain strategy.”
While the immediate strategy of importing cargo early is an appealing option, some industry experts worry that it might not be a universal one. Companies importing shelf-stable cargo like auto parts, packaging material or agricultural supplies will be able to stock those items in warehouses for however long they need, but more trend sensitive and perishable cargo, such as fashion products and food, present different challenges.
“While the market may look bleak for shippers who have products that are either perishable or trend-dependent, the reality is there are favorable rates to be had, making it more critical for these shippers to work with a well-connected logistics advisor who can help them navigate a very tricky and sophisticated market environment,” said Peter Hsieh, OEC Group Vice President of Sales. “Shippers need to remember that in 2025 it’s not about beating the tariffs or any other issue affecting the industry, it’s about beating your competitors.”
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