Will the anticipated port disruptions caused by ocean transportation volatility affect Full Truck Load spot rates? What should a Shipper expect and how can they mitigate the negative impacts? CPC will explore how the port congestion and reduced ocean freight volumes will reshape the trucking market, particularly Full Truck Load (FTL) spot rates, and provide a practitioner’s approach to optimize costs and capacity.
Tariffs on Chinese goods are significantly reducing cargo volumes at major US ports. The Port of Los Angeles expects a 35% drop in shipments starting May 2025. This decline, noted as “unprecedented” by industry experts, directly impacts inland transportation, including FTL services, as fewer containers require trucking from ports to distribution centers. This reduced freight demand will drive FTL spot rates downward in the short term, particularly in the West Coast markets that are dependent on ocean inflows. Shifting capacity or taking it off-line can occur.
Despite this softening, port congestion could potentially introduce upward pressures on spot rates. A 90-day tariff exemption for non-Chinese imports has prompted importers/shippers to expedite shipments and ship future demand; this volatility creates bottlenecks at smaller ports if vessels are forced to reroute. Ports are very familiar with congestion as seen during the Covid disruptions, already these delays are severe at Asian and European hubs with delays of 14-21 days and could spill over to US ports. As trucks wait longer for containers, competition for available FTL services may spike, driving spot rates higher, especially in the congested regions. Historically, drayage rates have jumped 32% in past disruptions, signaling potential cost spikes.
A Shipper can mitigate these negative impacts by engaging CPC Consultants to secure contract rates with Truck-Load carriers and explore diversifying entry ports, routing cargo through less congested East or Gulf Coast ports to avoid delays and rate spikes. CPC has extensive experience negotiating flexible FTL contracts with carriers that achieve locked-in rates amid volatility. CPC Consultants’ rate benchmarking tools help identify cost-effective carriers before a procurement event. Visibility reporting at the port with real-time data allows shippers to adjust schedules and avoid bottlenecks. Partnering with CPC Consultants to review your FTL contracts is a cost effective way of balancing risk, disruptions and optimizing cost.