News / Evergreen chief says transpac contract rates will rise in 2025

Evergreen is to raise its transpacific contract rates for 2025, announced president Wu Kuang Hui on Friday, due to global supply chains being impacted by the impending dockers’ strike on the US east coast.

He said: “The possibility of a strike at these ports is very high. Shippers must prepare in advance. The strike will impact not only the US east coast, but also the global supply chain.”

He added: “Regarding the market outlook for 2025, given the strike and geopolitical turmoil, the transpacific contract price next year is expected to be higher than this year.”

Despite warnings that the east coast ports strike could hit rates across the board, the Biden administration has stated that it will not intervene to prevent industrial action from happening.

Meanwhile, the ports on the US east coast, including New York/New Jersey, have made contingency plans in case of a strike, which could happen on 1 October, the day after the International Longshoremen’s Association’s current six-year labour agreement ends.

Mr Wu said: “Depending on how long the strike lasts, it will mean higher costs for shipping companies, and customers will encounter great challenges in shipments. We have reminded customers to discuss shipments and delivery times with us.”

While he acknowledged that freight rates had been falling, he attributed this to the early start of the traditional third-quarter peak season, and said trade demand continued to be stable.

Mr Wu said: “The Red Sea crisis continues to intensify, and congestion still plagues North American and Asian ports. Lunar new year in 2025 is earlier (in January) than in previous years. We think cargo volume will remain stable in the fourth quarter. For the safety of crew and cargo, mainline operators won’t allow their ships to return to the Red Sea until the geopolitical issues in the Middle East are resolved.”

Evergreen’s net profit rose nearly four-fold in H1 24, to TW$46.84bn (US$1.44bn), and Mr Wu said he was unfazed by the recent correction in freight rates, adding:“Evergreen’s cooperation with the Ocean Alliance is very smooth. Many long-term contracts have been signed and the price is less subject to fluctuations in spot freight rates.

“In addition, bunker prices have not changed much, so the impact on costs is not significant.”