How much will freight rates rise next year?

Dec 19, 2024 at 04:26 PM CST
On the December State of Freight webinar on Tuesday, FreightWaves CEO Craig Fuller and SONAR Director of Freight Market Intelligence Zach Strickland discussed the outlook for the 2025 freight market. In the prior month’s webinar, they declared the freight recession over. From here, the question becomes how dramatically the market will improve. Specifically, how much will freight rates rise? Fuller expects rates to rise at least 4% but would increase as much as 6% as changing market dynamics shift risks to shippers. He expects the change in the market to be felt more acutely in the second half of next year than the first since it takes time for the impact of new policies under the Trump administration to be felt. The Freightos ocean spot rate to move a 40-foot container from China to the U.S. West Coast declined from over $5,000 per unit throughout November to a current rate of $3,607 (white line above). Some of that decline may be explained by seasonality as demand generally declines in the fourth quarter when the peak ocean shipping period passes. But demand metrics seem to be holding up well, which the National Retail Federation attributes to frontloading by importers. For instance, the SONAR Inbound Ocean TEU Volume Index for the Port of LA (yellow line) has fully rebounded from its Golden Week low to its September level.

Dec 19, 2024 at 04:26 PM CST

On the December State of Freight webinar on Tuesday, FreightWaves CEO Craig Fuller and SONAR Director of Freight Market Intelligence Zach Strickland discussed the outlook for the 2025 freight market. In the prior month’s webinar, they declared the freight recession over. From here, the question becomes how dramatically the market will improve. Specifically, how much will freight rates rise? Fuller expects rates to rise at least 4% but would increase as much as 6% as changing market dynamics shift risks to shippers. He expects the change in the market to be felt more acutely in the second half of next year than the first since it takes time for the impact of new policies under the Trump administration to be felt.

The Freightos ocean spot rate to move a 40-foot container from China to the U.S. West Coast declined from over $5,000 per unit throughout November to a current rate of $3,607 (white line above). Some of that decline may be explained by seasonality as demand generally declines in the fourth quarter when the peak ocean shipping period passes. But demand metrics seem to be holding up well, which the National Retail Federation attributes to frontloading by importers. For instance, the SONAR Inbound Ocean TEU Volume Index for the Port of LA (yellow line) has fully rebounded from its Golden Week low to its September level.