February 2025 Carrier Market Update
Composite Technology International, Inc.
Because Quality Matters
FEBRUARY 4, 2025
Potential new tariffs and upcoming contract negotiations are key concerns for CTI Logistics as we work through Q1. ?While carriers are expected to push for higher contract rates—typically finalized in April—current market dynamics suggest downward pressure on pricing.
However, any newly imposed tariffs could disrupt this trend, as importers may rush to front-load shipments ahead of enforcement, temporarily driving up demand and rates. Staying agile in this shifting landscape will be critical for strategic decision-making.
Cargo's away! Let's dive in.
The Briefing
New Tariffs: Mexico & Canada 30-Day Delay
The Trump administration announced new tariffs on imports from Canada, Mexico, and China, citing national security concerns over the weekend. These include a 25% duty on general imports from Canada and Mexico, a 10% tariff on Canadian energy resources, and a 10% tariff on Chinese goods. However, agreements with Mexico and Canada have led to a one-month delay on the implementation of tariffs for their goods. In the short term, supply chain disruptions and pricing adjustments will be expected as businesses navigate the new tariffs.
Red Sea Routes: Will Shipping Return to Normal?
Carriers are considering a return to Red Sea shipping routes following a ceasefire between Israel and Hamas. This could lead to lower ocean freight rates, which had previously surged due to security concerns and vessel diversions. However, carriers remain cautious and are awaiting confirmation of sustained safety before resuming normal operations.
2M Alliance Splits: Shipping Shake-Up
The breakup of the 2M Alliance marks a major shift in global shipping, with MSC operating independently while Maersk and Hapag-Lloyd form the Gemini Cooperation launched February 1st. This restructuring could impact trade routes, capacity planning, and competition in the container shipping industry. The changes may lead to adjustments in freight rates, service reliability, and network efficiencies for global shippers.
Tentative Agreement Reached: ILA & USMX
The International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX) have reached a tentative six-year master contract agreement, averting a potential strike at East and Gulf Coast ports. The deal, announced on January 8, 2025, aims to protect current ILA jobs while establishing a framework for implementing technologies to modernize ports, enhance safety, and improve efficiency. The agreement is subject to ratification by both parties, during which the existing contract will remain in effect.
?
REFERENCED ARTICLES
领英推荐
Updated Rates
These rates were last updated on February 3, 2025.
Surcharges and Rates
CTI has seen a steady decline in spot rates since the beginning of the year. Congestion at origin load ports was minimal leading into the Chinese New Year holiday. New tariffs notwithstanding, we expect further decline in spot rates going into spring, and downward pressure could accelerate as Middle East tensions are decreasing and carriers are possibly returning to the Red Sea routings. Rates from South America are now starting to follow suit with Trans-Pacific rates declines.
?
New Ocean Alliances
The MSC standalone service, along with Gemini (Hapag & Maersk) alliance, is starting this February. ?We expect some delays due to vessel realignment and formation of new services, but the overall impact should be minimal. ?Blank sailings will be of bigger concern in coming months as carriers try to curtail the impact of new vessel capacity coming on-line and further eroding rates.
What’s New @ CTI
Sam Niethammer Promoted to Market Sales Representative
After four years at CTI, Sam Niethammer has been promoted to Market Sales Representative. Now, he’ll oversee accounts in the Mountain West and West Coast.
CTI is Heading to IBS 2025!
We’re excited to attend the National Association of Home Builders International Builders’ Show (IBS) this month! Join us to explore CTI’s latest innovations in millwork and door components. Let’s connect and discuss how our quality-driven solutions can support your business.
National Logistics Consultant at OEC Group
3 周Practically perfect.