Nuance in Ocean Freight Rates Could Be Another Front-Loading Tea Leaf

By Lori Ann LaRocco (gCaptain) – 

Ocean freight rates have jumped up for the December 15-31 bookings, signaling a tightness of space due to demand. Logistics managers tell gCaptain the special bullet rates have quickly disappeared for the time being and the spot rate is heading up.

The combination of an ILA strike, the possibility of additional tariffs by the incoming Trump administration plus an early Lunar New Year have shippers mitigating any slowdown or tariffs by pulling forward freight.

“In January, the triple witching hour of possible tariffs, work stoppages, and Chinese New Year is leading to significant increases in ocean pricing to USEC, USWC, and Gulf as of December 15,” warned Alan Baer, CEO of OL-USA. “Space is increasingly under pressure.”

The fact rates are going up is a tea leaf worth noting. This rate adjustment reflects what the Global Port Tracker is noting: an increase in front-loading.

The report forecasts November’s import volume at 2.17 million TEUs, a 14.4% year-over-year increase, and December at 2.14 million TEUs, up 14.3%. Total TEU volumes for 2024 are projected at 25.6 million, marking a 14.8% rise from 2023.

Ben Hackett, founder of Hackett Associates, did warn in the release, “The window to frontload goods on vessels arriving before a potential strike is quickly closing. Then there are issues as President-elect Trump promises to increase tariffs when he takes office.”

Matt Priest, President and CEO of the Footwear Distributors and Retailers of America (FDRA), tells gCaptain retailers will maintain their ILA strike threat strategy of pulling forward freight as well as shifting product transportation through West Coast ports.

The FDRA is one of many organizations calling on not only the Biden Administration but the Trump Transition team to do whatever they can to avoid an ILA strike.

“While these preparations are prudent, I do not believe the President-elect will allow a full-scale strike to occur, given the significant economic consequences it would impose on American businesses and families, particularly as we head into the New Year,” said Priest. “We remain hopeful for a long-term resolution that avoids disruption and supports the needs of both workers and the broader economy. We look forward to working with the new administration to lower costs for Americans, especially on essential items like footwear.”

Import data from Vizion shows Walmart bookings have been consistently higher each week beginning in the 3rd week in September. Similarly, Columbia Sportswear data shows imports have been consistently higher YOY each week since the election.

Aaron Phillips, Director of Analytics for Vizion, explained, “Both Walmart and Columbia Sportswear are showing more of these ‘front-loading’ behaviors.”

In ITS Logistics Port Rail Ramp Freight Index, Paul Brashier, Vice President of Global Supply Chain, wrote, “East and Gulf ports are seeing the normal December lull post retail peak and prior to the Lunar New Year. Surprisingly, the US West Coast ports are still experiencing significant import volumes, which may be a result of some inventory being pulled forward to avoid possible tariffs and ILA strike activity in January.”

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