Shipping costs surge at the start of the year! A group of sellers' profits are wiped out

At the beginning of 2025, the logistics stick was wielded aggressively at cross-border sellers.

2025 has arrived as scheduled, but logistics challenges still loom - shipping costs may usher in a new round of price increases.

It is learned that at the beginning of 2025, major shipping companies collectively disclosed the latest freight rate adjustment plan, and will increase the price of 40-foot standard containers in the first half of January:

• Evergreen Marine increased its US West Coast route by US$1,500 and its US East Coast route by US$1,050

• Yang Ming Marine Transport's US West Coast route increased by US$1,600, and US East Coast route increased by US$1,100

• MSC (Mediterranean Shipping Lines) and Wan Hai Lines increase their fares on US West Coast routes by US$1,000

According to reports, the overall freight rate increase in the West Coast of the United States is about 20% to 30%, and the increase in the East Coast of the United States is about 16% to 18%. As shipping giants have successively increased their prices, major routes are expected to usher in a new round of freight rate surges, among which the freight rate in the West Coast of the United States is expected to approach the US$6,000 mark, and the freight rate in the East Coast of the United States is expected to fall in the range of US$6,900-7,100.

According to the "China Export Container Transport Market Weekly Report" released by the Shanghai Shipping Exchange, the market freight rates for Shanghai Port's exports to basic ports in the West and East Coast of the United States have been on the rise for three consecutive weeks, rising to US$4,581/FEU and US$6,074/FEU respectively.

At the beginning of 2025, when the Chinese New Year is approaching, the shipping market environment has become increasingly unstable, and the fluctuations of multiple factors have further increased the cost and risk of cross-border transportation.

Judging from the current situation, the new round of price increases in shipping costs is mainly affected by two aspects.

1. Strike in the Eastern U.S.

At this stage, the strike in the eastern United States is intensifying and may affect about 45,000 dock workers. The latest news shows that the International Longshoremen's Association and the American Maritime Union plan to restart negotiations on a new main contract on January 7, and Trump has clearly stated his support for labor and opposition to the automation plan proposed by the employer, further increasing the risk of strikes in the eastern United States.

Once the strike is officially launched, it is likely to affect all ports along the East Coast and the Gulf of Mexico, further disrupting the container shipping market. In order to avoid risks, sea-going companies will also go out to sea earlier, resulting in an increase in demand. Faced with this trend, major shipping companies are responding by levying surcharges and raising prices.

2. Trump’s “tariff sword”

On the other hand, Trump's tariff policy is like a sword of Damocles hanging over his head. During the campaign, he said that if he won the election, he would impose a 60% tariff on Chinese goods. With his official inauguration, if this heavy sword falls, it is likely that sellers' costs will soar again.

Faced with this hidden time bomb, and with the Lunar New Year approaching, many sellers have been preparing goods for shipment in advance, which has also led to an increase in shipping demand, thereby driving freight rates further up.

Looking back at 2024, with the continued fermentation of geopolitical risks such as the Red Sea crisis and the fluctuations in the supply and demand relationship in the container shipping market, the logistics challenges faced by cross-border sellers have ushered in another major upgrade, with cost surges and delivery delays becoming the most common problems.

Among them, the increase in freight rates is undoubtedly one of the biggest obstacles on the road to sea. Public information shows that compared with the same period in 2023, the annual increase in freight rates in the West and East of the United States reached 80% and 70% respectively. In the environment where freight rates continue to soar, sellers' logistics costs are rising, while major shipping companies are making a lot of money.

According to recent reports from Taiwanese media, Evergreen Marine paid out 20 months of year-end bonuses on December 31. In terms of employee dividends, each person can receive at least 3.1 months' salary. According to the current trend of the shipping market, it is expected that after the shareholders' meeting next year, the mid-year dividends for employees are expected to reach 4 months' salary.

Another shipping company, Yang Ming Marine Transport, is also showing its generosity, and will pre-pay 5.5 months of bonuses before the Spring Festival. According to industry sources, based on Yang Ming Marine Transport's earnings per share reaching NT$14.79 in the first three quarters of 2024, it is expected to issue an additional 6.5 months of bonuses, bringing the total bonus amount to 12 months. In addition, employees will also receive dividends equivalent to at least 6 months of salary.

The bulging pockets of shipping companies are undoubtedly inseparable from the "contribution" of cross-border sellers. According to the survey conducted, the cost pressure imposed by logistics and warehousing fees has increased most significantly in the past year, and 48% of the sellers surveyed have significantly increased their logistics expenses compared to 2023.

As costs continue to rise, the cross-border logistics industry has also long been plagued by a series of chaos. Since the beginning of the year, freight forwarders have run away, logistics companies have collapsed, low-price cargo collection, and cargo seizures have emerged one after another, causing a series of chain reactions such as sellers running out of stock and cash flow interruptions.

In the ever-changing international trade environment, many sellers are facing multiple logistics challenges in the logistics link. Both the first-leg logistics and the tail-end distribution are under pressure. It is understood that in the year-end peak season of 2024, many sellers missed the best sales opportunity of Black Friday and Cyber ​​Monday due to reasons such as logistics delivery timeliness and warehouse warehousing delays.

Now that 2025 has just begun, on the one hand, Trump is ready to wield the tariff stick, and on the other hand, the cross-border container shipping market is constrained by multiple factors and may usher in a new round of price increases. Coupled with the rising logistics cost pressures of platforms such as Amazon, cross-border sellers will face more complex challenges in going overseas in the new year.