New Year heralds triple threat to US container shipping

The New Year is set to kick off with multiple bangs. Fifteen days in, the International Longshoremen’s Association (ILA) will strike, unless there’s a late Christmas miracle or container lines capitulate, knowing that Donald Trump will back labor when he’s sworn into office five days later.

Even if a strike at US East and Gulf coast ports lasts just an hour, there will still be modest disruptions. Amid mounting fears of a strike, in the days ahead of the Jan. 15 deadline, truckers will evacuate containers, US Class I railroads will stop accepting exports and marine terminals will no longer accept empty container equipment, as they did before the expiration of the Oct. 1 contract.

That three-day strike reduced effective capacity by tying up ships on the trans-Atlantic and trans-Pacific trades and throwing transshipment hubs out-of-whack. Rippling as well through north-south trades, the work disruption compounded congestion at key ports along the east of coast of South America.

Most US East and Gulf coast ports reduced the strike-associated ship backlogs within weeks, but a longer work stoppage this time around could challenge even the most efficient marine terminals. There is plenty of cargo coming down the pipe. US retailers aren’t expecting to let up on pulling through a surge of imports until early spring at the soonest, according to the latest Global Port Tracker.

Five days after the tentative contract deadline expires, Donald Trump is set to begin his second term and can trigger his threatened US tariffs on Chinese goods on day one by citing security issues. Trump’s other threat of a 25% US tariff on Mexican and Canadian goods shows not even near-shoring is safe from his reach.

Even if Trump holds back on unleashing higher US tariffs on goods from China and other trading partners in his first 90 days in office, the specter that provoked multiple waves of varying degrees of front-loading ahead of the tariffs imposed in his first term hangs over all US trades into at least 2025.

New alliance growing pains

Meanwhile, on Feb. 1, two new shipping alliances launch simultaneously. The industry’s attention will be focused on the rollout of the Gemini Cooperation, the alliance between Maersk and Hapag-Lloyd, as it will be the most ambitious hub-and-spoke network the industry has seen. Gemini’s strategy has been tested using a “digital twin” in the hypothetical, but not physical world.

The Premier alliance launches its own network on the same day, without former THE alliance partner Hapag-Lloyd. Overlapping Gemini’s hub-and-spoke network will be the more conventional, direct networks of the Ocean alliance,, composed of Ocean Network Express (ONE), HMM and Yang Ming and OCEAN alliance, which launches in April. With its strong lead in tonnage, Mediterranean Shipping Co. no longer needs an alliance partner for its February launch but is striking slot-sharing pacts with the Premier alliance and Zim Integrated Shipping Services, nonetheless.

“While operational disruptions from fleet deployment on [Gemini’s] routes may not be immediately apparent in the first three to four voyages, I believe port operational capabilities will be tested,” said analyst Heather Hwang, team leader of market intelligence analysis at South Korea-based LX Pantos.

The concentration of ultra-large container ships at hub ports will require Gemini to tap more feeder vessels than before, which, coupled with potentially higher volumes caused by US tariffs, will challenge transshipment hubs from the onset, Hwang said.

The launch of new alliances will take out a significant amount of capacity, even if for only a few weeks, said Alphaliner senior analyst Jan Tiedemann.

“Ships will have to be emptied of cargo, filled again, change services, wait for phase-in into their designated new service,” he said. “They will miss sailing windows and skip ports to catch up.”

There is little buffer capacity if something goes severely wrong in early 2025. Just 0.5% of the fleet was idled as of late November, according to Alphaliner. Through most of 2026, the analyst forecasts container lines will receive 100,000 to 200,000 TEUs monthly in capacity from shipyards after successfully absorbing new tonnage in 2024. Carriers have little incentive to start scrapping.

“In times of frequent trade disruptions, better hold on to the tonnage you have,” Tiedemann said. “It might come in handy.”

Stretching price elasticity

Whatever the source of disruption, the container lines can be expected to capitalize on the opening to seek higher rates, as they did in the final weeks of December. Carriers usually seek price increases before the lull in shipments due to Lunar New Year celebrations, but they’ve been rewarded by pushing harder and faster on those increases, most recently in the wake of Red Sea diversions.

While carriers may seek general rate increases (GRIs) and get none or just a portion of the amount sought, they are setting their aims higher. In a small sign of this more aggressive approach to dynamic pricing, no carrier in 2023 was seeking more than $1,000 per FEU in terms of early and mid-month GRIs filed with the US Federal Maritime Commission. Now, four of the eight top carriers operating on the trans-Pacific trades are seeking upward of $3,000 per FEU twice a month.

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