Recent events affecting the maritime market
Global trade is shifting, and businesses are moving fast to keep up. With tariffs on the way, many are rushing to bring in goods before costs go up. At the same time, changing shipping contracts and rising carrier rates are adding more uncertainty. As space tightens and prices change, it’s worth asking — should you adjust your international shipping strategy?
Let’s look at what’s happening and how you can stay ahead.
Navigating tariff announcements
With talks of international tariffs taking place under the new administration, imports surged in Q4 and into the new year. Currently, there is a 30-day pause on tariffs from Mexico, but businesses continue to expedite shipments in anticipation of future trade barriers.
If tariffs are imposed on Mexican imports, the popularity of nearshoring could decrease, and businesses may begin to shift production to areas like India and Southeast Asian Countries. However, these regions face infrastructure challenges, including limited port, road and rail capacity, making an immediate transition difficult. Some industries may also look to increase production within the United States.
Shifting production would be a long-term strategy rather than a quick fix for avoiding tariffs. Since policies remain uncertain, this is the time to rely on expert logistics professionals to stay up to speed and find ways to keep your costs under control.
Annual contract negotiations are happening
All Transpacific Ocean liner contracts expire on April 30 each year, and carriers typically seek higher rates for their new service contracts. Carriers focus on the largest importers in the market, leaving small and medium-sized importers to work with Non-Vessel Operating Common Carriers (NVOCCs) and freight forwarders.
Cargo strategy: balancing spot and contract rates
With Beneficial Cargo Owners (BCOs) contract rates expected to remain higher than pre-pandemic levels and spot rates likely to fluctuate in an uncertain market, a dual strategy may be the best approach for 2025.
Approximately half of all import containers, controlled by the largest importers, are shipped directly with BCO contracts, while the other half are transported through freight forwarders. Large enterprise companies that have traditionally relied on BCO contracts for stability may find this strategy no longer provides this benefit. By integrating spot rate shipments through NVOCCs alongside established contract rates, companies can achieve greater flexibility, access additional capacity during peak season or disruptions, and realize cost savings during market downturns or periods of tight capacity.
Transpacific Carriers generally prioritize spot rate shipments managed by NVOCCs when rates exceed the levels set by BCO contracts. By restricting weekly capacity to these customers and delaying shipments, carriers create a bottleneck of cargo that affects importer's supply chains.
Carriers may utilize blank sailings to manage the supply/demand balance, influencing market price increases. For the largest U.S. importers, maintaining a balanced mix of direct BCO contracts and spot rates can strengthen their supply chains. By partnering with an NVOCC for a portion of their shipments, large importers can achieve rate stability, access to competitive pricing throughout the year and sufficient capacity during peak shipping periods.
For small and medium-sized importers it is essential to establish a long-term relationship with a single NVOCC. This helps provide competitive rates through various pricing cycles. The NVOCC should have access to multiple carriers and provide specific weekly space allocations, guaranteeing sailing flexibility and transit time options. The freight forwarder should also understand the customer's global supply chain requirements and challenges and work closely with all foreign vendors to provide a steady and reliable service at the best overall freight price.
Ship international with ArcBest
No matter your business size, staying informed about the maritime market is crucial for maintaining service and cost stability. ArcBest helps small and medium businesses secure capacity and establish SOPs. For enterprise shippers managing contract rates, we offer strategic guidance on balancing contract and spot rates.
With ArcBest, you get expert support and strong industry relationships to navigate international shipping challenges efficiently. Let us help you ship with confidence through any market conditions.
Interested in other market insights? Read our latest truckload market update.
