Year-End Shipping Price Storm: Port Congestion, Cost Surges, and the “Multiple Resonance” of Global Supply Chains

Every fourth quarter, the global shipping market inevitably experiences a cyclical “price storm.” During the 2024 year-end shipping peak season, the intensity of this storm exceeded all expectations: the freight rate for the China-US West Coast route soared from \(1,800 per FEU (40-foot equivalent unit) in September to \)4,200 per FEU in December, a staggering increase of 133%; the peak number of ships waiting to berth at the Port of Los Angeles exceeded 45, with the average detention time extending to 8 days; the bunker adjustment factor (BAF) for European routes rose by €300 per container, and when combined with port congestion surcharges, the average cross-border logistics costs for enterprises increased by 40%.

This price storm is not caused by a single factor but rather the “resonant result” of multiple pressures, including port congestion, skyrocketing fuel costs, geopolitical conflicts, and concentrated year-end restocking demand. It not only impacts the profit margins of freight forwarders and shippers but also exposes the vulnerability of global supply chains in the face of cyclical fluctuations and sudden risks. This article will conduct an in-depth analysis of the causes, spread paths, and industry impacts of this year-end shipping price storm, providing response strategies for supply chain participants.

I. On-Site Scene: Three Core Chaos in the Year-End Shipping Market

The outbreak of the 2024 year-end shipping price storm is characterized by “irrational freight rate surges, port congestion, and timeline breakdowns.” These three phenomena are intertwined, forming an “year-end predicament” in the global shipping market.

(I) Irrational Freight Rate Surges: Multiple Routes Hit Annual Peaks

Freight rates on major global routes showed a “steep rise” in the fourth quarter, breaking the peak growth record of the past three years. According to the SCFI (Shanghai Containerized Freight Index) released by the Shanghai Shipping Exchange (SSE), in the first week of December 2024, the freight rate for the US West Coast route reached \(4,183 per FEU, a 133% increase from the September low; the US East Coast route hit \)5,625 per FEU, a 92% rise; the European basic port route surged from \(1,100 per FEU to \)2,350 per FEU, an increase of 113%; while the Southeast Asian route saw a relatively moderate growth of 35%, reaching $890 per FEU.

More notably, the freight rate increase exhibits “irrational characteristics”: some freight forwarders took the opportunity to hike prices, with “sky-high quotes” of $6,000 per FEU appearing in the spot market for the US West Coast route; shipping companies launched as many as 12 types of surcharges, including “peak season surcharges” and “emergency booking fees,” accounting for over 30% of the total freight rate; a situation of “difficulty in booking and high costs for cabin space” even emerged. To ensure timely delivery of goods, enterprises had to accept “premium bookings,” with the logistics cost ratio of some orders rising from the conventional 15% to 35%.

(II) Worsening Port Congestion: Major Global Hub Ports Plunged into “Detention Tide”

Port congestion is the “trigger” of this price storm. Four out of the world’s six major container hub ports are caught in varying degrees of congestion, with the US West Coast and European ports being the most severely affected.

US West Coast Ports: Congestion Returns to 2021 Peaks. As the core hubs of the US West Coast route, the Port of Los Angeles and the Port of Long Beach have seen a continuous increase in the number of ships waiting at anchor since November, peaking at 45 vessels, among which 28 ships waited more than 5 days to berth. Gene Seroka, Executive Director of the Port of Los Angeles, stated that the port’s container throughput increased by 18% year-on-year in October, but terminal operational efficiency dropped by 22%, mainly due to a shortage of truck drivers, insufficient storage space, and frequent failures of automated equipment. Data shows that the average stay time of containers at the port extended from the conventional 3 days to 8 days, and some refrigerated containers deteriorated due to detention, with the maximum loss per container reaching $50,000.

European Ports: Congestion Escalates Due to Multiple Pressures. The Port of Rotterdam and the Port of Hamburg were affected by the low water level of the Rhine River, which hindered inland waterway transportation connections. Coupled with the Christmas restocking peak, their container throughput increased by 12% year-on-year in November, but insufficient terminal loading and unloading capacity led to an average ship detention time of 6 days. Data from the Port of Hamburg shows that the terminal yard utilization rate exceeded 95%, and container accumulation caused “loaded container congestion at the port.” Some ships had to divert to the Port of Antwerp for unloading, incurring additional transportation and time costs.

Chinese Ports: “Port Jam” Caused by Strong Export Demand. As the world’s top two ports in terms of throughput, the Port of Ningbo-Zhoushan and the Port of Shanghai saw their export container throughput increase by 15% and 13% year-on-year respectively in October-November. This led to the terminal shoreline utilization rate exceeding 90%, and the average waiting time for ships to berth extended to 3 days. Due to the concentrated arrival of large ships at some berths of the Port of Ningbo-Zhoushan, a phenomenon of “ships waiting for berths” occurred. Some freight forwarders notified customers that an additional 5-7 days of buffer time should be reserved for cargo shipment timelines.

(III) Timeline Breakdown: Rising Risk of “Last Mile” Disruption in Supply Chains

The skyrocketing freight rates and port congestion directly led to a serious breakdown in cross-border logistics timelines, significantly increasing the risk of “last mile” disruption in supply chains.

• China-US West Coast Route: The conventional transportation timeline of 18-22 days extended to 30-35 days in December. Some goods failed to be delivered before Christmas due to port detention, forcing retailers to bear “stock-out penalties”;
• China-Europe Route: The transportation timeline lengthened from 28-32 days to 40-45 days. Some high-value-added goods (such as electronic products) resulted in order cancellations due to delays, with an enterprise loss rate of 10%-15%;
• Cross-Border E-Commerce Logistics: Amazon FBA warehouses experienced “overcrowding,” and the waiting time for goods acceptance at US West Coast warehouses increased from 2 days to 7 days. Sellers’ Listing rankings dropped due to logistics delays, leading to an average sales decline of 20%.

The timeline breakdown also triggered a chain reaction: to avoid risks, enterprises have successively increased safety stock, leading to rising warehousing costs; some enterprises chose “air-sea intermodal transportation” or “rail-sea intermodal transportation” instead of pure ocean shipping, further pushing up comprehensive logistics costs.

II. Resonant Causes: Four Core Factors Triggering the Year-End Shipping Storm

This year-end shipping price storm is not accidental but a multiple resonance of four factors: “cyclical demand + structural bottlenecks + sudden risks + artificial speculation,” forming a vicious circle of “congestion – price increase – further congestion.”

(I) Cyclical Demand Peak: “Export Boom” Driven by Year-End Restocking

The year-end restocking demand for festivals such as Christmas and New Year is the “conventional driving force” for the shipping peak season. In 2024, the global consumer market showed a “weak recovery” trend. To cope with the year-end shopping season, retailers launched restocking plans in advance, resulting in the concentrated release of export demand in the fourth quarter.

• US Market: Expectations for the Thanksgiving and Black Friday shopping seasons drove retailers to increase import orders starting from September. Data from the US Department of Commerce shows that US container imports increased by 16% year-on-year in October, reaching a new high for the year;
• European Market: Christmas restocking demand led to an 11% year-on-year increase in imports of the 27 EU countries in October, among which imports of consumer goods (such as household items and electronic products) from China grew by 23%;
• Chinese Exports: Data from the General Administration of Customs shows that China’s export container volume increased by 12% and 15% year-on-year respectively in October-November 2024, with the export volume of US and European routes both increasing by over 20% year-on-year. The concentrated outbreak of export demand far exceeded the carrying capacity of ports and shipping companies.

(II) Structural Bottlenecks: “Long-Term Shortcomings” of Ports and Shipping Industry

Behind the port congestion are the long-standing structural bottlenecks in the global shipping industry, which have been further amplified under the year-end demand peak:

1. Insufficient Port Infrastructure: The upgrading of infrastructure at major global hub ports lags behind the development of the shipping industry. The proportion of automated terminals at the Port of Los Angeles and the Port of Long Beach is only 30%, far lower than that of the Port of Singapore (70%) and the Port of Ningbo-Zhoushan (65%), resulting in low manual operation efficiency; the quay cranes and yard equipment at European ports are aging, and their loading and unloading efficiency is 25%-30% lower than that of Asian ports.
2. Imbalanced Supply and Demand of Shipping Capacity: During the boom period of the shipping market from 2020 to 2022, shipping companies placed a large number of new ship orders, but the delivery of new ships is concentrated in 2025-2026. In 2024, the global container ship capacity growth rate was only 4.5%, while the demand growth rate reached 8%. The capacity gap led shipping companies to “hoard cabin space,” further pushing up freight rates. In addition, to control costs, shipping companies implemented a “slow steaming strategy,” reducing the ship speed from 24 knots to 18 knots, which equivalently reduced the effective supply of shipping capacity.
3. Poor Supply Chain Connection: Port congestion not only stems from terminal operations but also involves the whole-chain connection problem of “ship-port-truck-warehouse.” The shortage of truck drivers at US West Coast ports continues to worsen, with a current gap of 30,000, leading to low efficiency in the “last mile” of transporting containers from terminals to warehouses; at European ports, due to the low water level of the Rhine River, inland barge transportation is hindered, and containers cannot be evacuated in a timely manner, increasing the pressure on terminal yards.

(III) Sudden Risks: Geopolitical Conflicts and Energy Price Volatility

Since the second half of 2024, geopolitical conflicts and rising energy prices have become the “catalysts” of the shipping price storm, further exacerbating market volatility:

1. Escalating Red Sea Crisis: Attacks on Red Sea shipping lanes by Yemen’s Houthi rebels have disrupted 12% of global maritime trade. Multiple container ships have been forced to divert around the Cape of Good Hope, increasing the voyage by 3,000 nautical miles and adding $500,000 in additional costs per ship. Although the mainstream US West Coast and European routes are not directly affected, some shipping companies have diverted capacity from the US West Coast route to alternative Red Sea routes, leading to further tightness in the US West Coast route capacity and passive increases in freight rates.
2. Sharp Fluctuations in Fuel Prices: International oil prices rose by 20% from October to December, with Brent crude oil prices increasing from \(80 per barrel to \)96 per barrel, leading to a significant increase in ship fuel costs. Shipping companies have successively raised the bunker adjustment factor (BAF). The BAF for the US West Coast route increased from \(150 per FEU to \)450 per FEU, and for European routes from €200 per FEU to €500 per FEU, becoming an important driver of freight rate increases.
3. Impact of Extreme Weather: Since November, frequent extreme weather such as hurricanes in the North Pacific and cold waves in Europe has caused delays in ships on multiple routes. Some ports were temporarily closed due to weather conditions, further exacerbating port congestion and capacity shortages.

(IV) Artificial Speculation: Market Speculation Intensifies Price Volatility

The irrational rise in the shipping market is also inseparable from speculative activities in the freight forwarding industry. Some small and medium-sized freight forwarders locked in shipping company cabin space at low prices and resold them at high prices through “hoarding cabin space” and “speculating on cabin space,” leading to spot market freight rates deviating from the reasonable range.

According to internal industry data, in November 2024, the average freight rate announced by shipping companies for the US West Coast route was \(3,200 per FEU, but the spot quotes in the freight forwarding market generally ranged from \)4,000 to \(6,000 per FEU, with the maximum price difference reaching \)2,800 per FEU. Some freight forwarders even launched an “auction-based booking” model, where enterprises had to compete for cabin space through high-price bidding, further amplifying price volatility. In addition, the lack of transparency in shipping companies’ charging items such as “peak season surcharges” and “congestion surcharges” has also provided space for price speculation.

III. Impact Spread: Chain Reactions from Shipping Industry to Global Supply Chains

The impact of this year-end shipping price storm is not limited to the shipping industry but spreads upstream and downstream through the supply chain, causing all-round impacts on various market entities such as manufacturing enterprises, retailers, and cross-border e-commerce.

(I) Manufacturing Enterprises: Profits Squeezed, Order Stability Declines

For export-oriented manufacturing enterprises, the skyrocketing logistics costs directly squeeze profit margins. Taking a small and medium-sized enterprise specializing in furniture exports as an example, the unit price of its products exported to the US is \(100, with the conventional logistics cost accounting for 15% (\)15). In December, the logistics cost ratio rose to 35% ($35), while the product selling price could not increase synchronously due to market competition, leading to a drop in gross profit margin from 20% to 5%.

More seriously, the breakdown of logistics timelines has led to a decline in order stability. Some overseas buyers have chosen to cancel orders or switch to local suppliers due to concerns about delayed delivery of goods, resulting in an order loss rate of 8%-12% for Chinese manufacturing enterprises. In addition, to cope with logistics uncertainty, enterprises have to increase raw material inventory and finished product inventory, leading to an increase in capital occupation costs and further exacerbating operational pressure.

(II) Retailers: Rising Stock-Out Risks, Increased Operating Costs

The year-end shopping season is the “golden period” for retailers’ sales, but the stock-out risks caused by the shipping price storm directly affect their sales performance. Data from the National Retail Federation (NRF) shows that before the 2024 Christmas season, the inventory satisfaction rate of major US retailers was only 85%, a 10-percentage-point decrease from last year, with electronic products, household items, and other categories facing the most severe stock-outs.

To avoid stock-outs, retailers have to adopt “emergency restocking” measures, choosing more costly air freight or express delivery. For example, a US supermarket chain switched 1,000 containers of goods from ocean shipping to air freight to replenish Christmas gift inventory, with the logistics cost per container increasing from \(200 to \)800, resulting in an additional cost of $600,000. In addition, cargo delays caused by port congestion have put some retailers at risk of “missing the sales window period,” and unsold products have to be sold at reduced prices, further eroding profits.

(III) Cross-Border E-Commerce: Declining Listing Rankings, Deteriorating User Experience

Cross-border e-commerce is highly dependent on logistics timelines, and the impact of the shipping price storm is particularly significant. Data from Amazon’s platform shows that the order delay rate of Chinese sellers on the US West Coast site reached 30% in November-December, a 20-percentage-point increase from usual. A large number of sellers experienced a drop in Listing rankings due to logistics delays, resulting in a 30%-40% decrease in natural traffic.

At the same time, the rise in logistics costs has reduced the price competitiveness of cross-border e-commerce. A cross-border e-commerce seller stated that the profit margin of its sold 3C accessories is only 10%, but the increase in logistics costs in December completely eroded the profits, forcing them to raise product prices, leading to a 25% drop in sales. In addition, problems such as cargo detention at ports and damage have led to an increase in user complaint rates, and sellers’ store ratings have declined, further affecting long-term operations.

(IV) Shipping Industry: Short-Term Profit Surge, Long-Term Hidden Troubles Emerge

For shipping companies, this price storm has brought a short-term surge in profits. The Q4 2024 financial reports of leading shipping companies such as Maersk and COSCO Shipping show that their revenues increased by 45% and 38% year-on-year respectively, and their net profits increased by 62% and 55% year-on-year respectively. However, behind the short-term high profits, there are also long-term hidden troubles:

• The irrational rise in freight rates may trigger resistance from downstream industries, and some enterprises may switch to alternative transportation methods or adjust their supply chain layouts;
• The delivery volume of new ships will increase significantly in 202