(Editor’s Note: Navigating the ever-changing and unknown factors faced by the transportation industry in 2025 will present challenges. The most creative problem-solvers will be those who, like our respondents here, propose to expand domestic capabilities while being versatile, resilient logistics partners who are shaped by external challenges and opportunities, yet able to adapt to global trade to ensure goods continue to reach their destinations.
Read and learn what our logistics experts shared with us regarding the industry in 2025.)
Stephen A. Zambo
The AGL Group
Jacksonville, FL
Throughout 2024, transportation serving the lumber industry has remained largely stable, with consistent capacity and pricing trends. However, a notable disruption was the ILA (International Longshoremen’s Association) port strike, which created temporary bottlenecks and logistical challenges for many shippers reliant on East and Gulf Coast ports. This strike underscored the industry’s vulnerability to labor disputes and the importance of contingency planning. This will be one of the potential issues with a looming strike again on January 15th. Overall, stability in the transportation sector supported reliable movement of lumber and related products, fostering confidence in supply chain continuity.
2024 has been the most stable year for supply chains in recent memory, following several years of significant disruptions. Key factors such as improved carrier reliability, more predictable freight rates, and for the most part balanced capacity have contributed to the stability. The absence of major geopolitical shocks, aside from the ILA port strike, allowed supply chains to operate efficiently and with fewer interruptions. Businesses were able to plan and execute their logistics strategies with greater confidence, and this stability benefited the lumber industry as a whole. Looking ahead to 2025, we anticipate some challenges. Impending potential tariffs could create short-term volatility, particularly for importers and exporters navigating changing cost structures. Additionally, the January 15th port strike may disrupt operations, especially for those relying on affected ports. While these issues could create temporary turbulence, we expect overall shipping conditions to remain relatively stable barring unforeseen events.
One notable trend is the ongoing reorganization of carrier partner networks. This restructuring is likely to result in new shipping lanes, additional capacity, and shifts in the carriers that shippers rely on. While this may present an adjustment period for some, it should ultimately create new opportunities for more efficient shipping solutions as the market realigns.
Rates overall are expected to remain relatively stable throughout 2025, barring any unforeseen disruptions. While potential challenges such as the January 15th port strike or new tariffs could introduce temporary fluctuations, the current balance of supply and demand in the market suggests no significant rate volatility. Carriers’ ongoing network reorganizations and the addition of new capacity in certain lanes may also help to maintain stability once we get through the initial changes. That said, shippers should stay vigilant, as there are many factors that could still influence rates at a local or global level.
Shipping volumes in Q4 2024 experienced a significant drop in October, primarily due to the impact of the port strike, which disrupted operations and delayed shipments across multiple industries. However, outside of this anomaly, volumes aligned closely with historical trends for the remainder of the quarter, demonstrating resilience in the face of logistical challenges.
Looking ahead to Q1 2025, we anticipate sluggish volume metrics. Contributing factors include the lingering effects of the port strike, uncertainty tied to a change in administration, and the potential for new tariffs, which could dampen market activity and disrupt trade flows. These headwinds may lead to a slower-than-expected start to the year, though we remain optimistic that volumes will stabilize as these issues are addressed and businesses adapt to the evolving landscape.
The current state of the U.S. economy is difficult to predict with certainty, as it is shaped by a complex mix of factors. The stock market appears overheated, suggesting a disconnect between equity valuations and the broader economic fundamentals. Meanwhile, the average consumer has been grappling with the cumulative effects of inflation over the past few years, which has eroded purchasing power and constrained household budgets.
This dynamic creates an interesting and somewhat precarious situation. While certain sectors of the economy remain strong, others are showing signs of strain, reflecting uneven growth. Heading into the New Year, much will depend on how inflation trends, interest rate policies, and consumer confidence evolve. It’s anyone’s guess what happens from here.
To prepare for the expected new tariffs and change in administration, we have been strategically building our domestic trucking division over the last four years. This initiative aligns with the anticipated shift of some clients towards domestic markets as they seek to mitigate the impact of increased international uncertainty. Our goal is to scale this division to match the size of our export division within the next three years, reflecting our commitment to balancing international and domestic operations.
To support this growth, we have hired talented individuals within AGL who bring expertise in domestic logistics and can help our clients navigate these changes effectively. By expanding our domestic capabilities, we aim to provide seamless solutions for our clients both domestically and internationally while positioning ourselves as a versatile and resilient logistics partner in a changing trade environment.
Peter Lovett
King City Forwarding USA, Inc.
Chesapeake, VA
As 2024 draws to a close, the lumber industry has navigated a year marked by significant disruptions and challenges in ocean transportation and logistics. From geopolitical crises to fluctuating shipping costs, and shifting demand patterns, 2024 has proven to be a transformative year. Looking ahead to 2025, the industry faces continued uncertainties and opportunities.
The transportation of lumber in 2024 is shaped by several key trends. Supply chain issues, which have persisted since the pandemic, continue to cause disruptions.
Firstly, The Red Sea crisis, sparked by Houthi attacks in late 2023, has severely disrupted global shipping. Attacks on vessels, including the hijacking of the Galaxy Leader, have made the waterway extremely dangerous. This has forced ships to detour around Africa, significantly increasing travel times and costs. Consequently, maritime traffic through the Suez Canal and Bab el-Mandeb Strait has plummeted, exacerbating existing supply chain disruptions caused by the pandemic, the Ukraine war, and the global economic slowdown.
Another significant blow came on March 26, 2024, when the Francis Scott Key Bridge in Baltimore collapsed after being struck by the cargo ship MV Dali. The collapse blocked the entrance to the port, halting ship traffic and causing major delays. Containers were rerouted, adding significant costs to shippers and contributing to delays in deliveries.
Finally, in October 2024, a strike by over 47,000 port workers along the U.S. East and Gulf coasts disrupted shipping operations. The International Longshoremen’s Association (ILA) sought significant wage increases and job security measures, while the U.S. Maritime Alliance (USMX) negotiated to protect employers’ interests. The strike caused significant supply chain disruptions, potential shortages, and economic losses. A tentative agreement was reached, averting a prolonged crisis.
In Q4 2024, shipping volumes in the lumber industry have seen a slight increase compared to the early parts of the year, in line with traditional seasonal peaks. However, volumes are steadily rebounding as companies ramp up production for the new year. Export volumes to Asia and Europe remain relatively strong, with Southeast Asia showing notable growth in demand for U.S. lumber products. However, global trade uncertainty, coupled with fluctuating demand in key regions, suggests that growth will be moderate, rather than explosive. Port congestion and container shortages could still pose challenges early in the year, but many industry players expect smoother operations by mid-2025.
Looking towards 2025, it is undeniable that the ocean container shipping industry will likely face continued challenges. Geopolitical risks are currently at a critical level, and it would be unwise to disregard them. We anticipate continued pressure on container availability and fuel costs, but the industry is likely to see a slower recovery in terms of full capacity at key ports. Given the rising fuel prices, labor shortages, and higher demand for shipping services in certain global markets, rate increases are likely to persist throughout 2024 and into 2025. While container rates have seen fluctuations over the past few years, the overall trend is towards stabilization at higher levels than pre-pandemic. The impact of these increases will vary by region, but expect higher shipping rates on major trade routes—especially to emerging markets.
The year 2025 witnessed a significant reshaping of the maritime alliance landscape, marking a departure from the established order. The dissolution of the powerful 2M Alliance, a decade-long partnership between Maersk and MSC, sent shockwaves through the industry. This seismic shift paved the way for new collaborations and a more fluid competitive environment.
Maersk, seeking to solidify its position as a global leader, entered into a strategic alliance with Hapag-Lloyd, forming the Gemini Cooperation. This new entity aimed to leverage the strengths of both companies, combining Maersk’s extensive network with Hapag-Lloyd’s operational expertise.
MSC, no longer bound by the constraints of 2M, embarked on an independent course, expanding its global reach and service offerings. This move positioned MSC as a formidable standalone player, capable of competing aggressively in the evolving market.
The remaining members of THE Alliance, namely ONE, HMM, and Yang Ming, rebranded as the Premier Alliance.
This consolidated entity sought to capitalize on its combined strengths, focusing on key trade lanes and enhancing service reliability.
The Ocean Alliance, comprising CMA CGM, COSCO Shipping, Evergreen, and OOCL, remained largely unchanged, continuing to operate as a formidable force in the industry.
These shifts in alliances had a profound impact on the global shipping landscape. Competition intensified as carriers sought to differentiate themselves and attract customers. Service offerings became more diverse, with a wider range of options available to shippers.
As we move into 2025, it is clear that the lumber industry’s ocean transportation will continue to be shaped by external challenges and opportunities. We remain committed to navigating these changes, and I wish everyone in our industry a healthy and prosperous New Year. Thank you for your ongoing support as we face another year of transformation.
Curtis Struyk
TMX Shipping Co., Inc.
Morehead City, NC
Lumber and log exports saw a steady demand throughout 2024, driven by the ongoing need for sustainable building materials and urban development. There was a notable rise in our shipments to China, Vietnam, India, the UK, and the UAE. Overall, while the lumber industry faced several challenges in 2024, it also adapted through innovation and strategic planning to meet the evolving demands of the global market.
In 2024, many industries, including lumber, faced supply chain disruptions due to geopolitical tensions and logistical bottlenecks. Companies adapted by diversifying suppliers and increasing inventory buffers. For 2025, the focus will likely be on enhancing supply chain resilience through advanced technologies and better risk management strategies. Some mills reduced production or shut down due to lower demand and profitability, further restricting supply. While some challenges may persist, there are signs of gradual improvement in the lumber industry’s supply chain in 2025.
In 2025, several major shipping carriers have announced a general rate increase (GRIs). These increases reflect ongoing challenges such as rising labor costs and the need for infrastructure investments. The challenges to increasing ocean freight rates also persist with increasing supply coming on the market and challenges repositioning equipment to Asia for more profitable traffic lanes. I expect there will be some increased freight rates as long as there is demand.
Shipping containers have been in high demand globally, with costs fluctuating significantly. In 2024, container shipping rates increased slightly compared to the previous year, primarily due to geopolitical disruptions in the Middle East and Red Sea and high demand for some destinations affected by the rerouting of vessels around the Cape of Good Hope. With a steady flow of imports continuing, I don’t expect to see any significant shortages of containers in any major U.S. ports.
In the fourth quarter of 2024, lumber export volumes experienced a slight decline due to ongoing supply chain disruptions and reduced sawmill production. The 2024 U.S. port strike also played a significant role in halting the flow of goods, causing delays and increased costs. Still, we finished the year strong, outpacing our overall volume in 2023 by 10 percent. Looking ahead to the first quarter of 2025, there are expectations for gradual increases in shipping volumes. Then, of course, there are still unresolved issues between the United States Maritime Alliance’s (USMX) and the International Longshoremen’s Association (ILA) that are to be resolved by January 15, 2025, or there is the risk of another port strike on the East and Gulf Coasts.
The U.S. economy grew at an annual rate of 2.8 percent in the third quarter of 2024, driven by consumer spending and business investments. Looking ahead to 2025, growth is expected to moderate slightly to around 1.7 percent due to potential geopolitical risks and inflationary pressure. With high expectations, we will have a new president in the White House in January. I can’t help but feel optimistic about our future.
With new tariffs anticipated in 2025, particularly from the incoming administration, companies are preparing by reassessing their supply chains, exploring alternative sourcing options, and adjusting pricing strategies to mitigate the impact. Over time, the trade threat could be offset in other ways if Trump uses the tariff threat as leverage in negotiations with China on different fronts. Like water, global trade adapts to obstacles and finds new routes to flow through. Despite challenges like geopolitical tensions, supply chain disruptions, and economic fluctuations, the resilience and adaptability of global trade ensure that goods, including lumber, continue to reach their destinations. It’s a testament to the ingenuity and persistence of industries and economies worldwide.
