Three Critical Challenges for International Shippers in 2025 and How to Prepare

As we approach 2025, businesses engaged in international trade face three major supply chain hurdles: the disruptions caused by Chinese New Year (CNY), the looming threat of potential tariffs on foreign-made products, and the unresolved contract negotiations between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX).

These factors can lead to significant shipping delays, production slowdowns, and increased costs. However, with proactive planning and the right logistics partner, these challenges can be mitigated.

Chinese New Year 2025: A Disruptive Holiday

CNY 2025 begins on January 29, marking a critical period for global supply chains. CNY is one of the most significant holidays in Asia, and its impact on global supply chains is profound. As factories across China and other regions shut down for weeks, production halts and freight demand skyrockets. 

Why CNY Disruptions Matter

The ripple effects—ranging from increased shipping costs to extended lead times—can disrupt even the most well-planned operations.

1.) Factory Shutdowns

• Most factories close completely for at least two weeks, and many start reducing output as early as mid-January. Full production capacity may not return until mid-February.
• For businesses relying on “just-in-time” inventory, this creates a significant risk of stockouts.

2.) Surge in Freight Demand

• The weeks leading up to CNY see a rush to fulfill orders, causing freight costs to spike. Ports experience congestion, and container shortages become common.

3.) Post-Holiday Backlogs

• Even after CNY, delays persist as factories ramp up and deal with workforce shortages. Port congestion worsens as shipments resume, extending lead times.

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How to Prepare for Chinese New Year Disruptions

For shippers, the key to minimizing these disruptions lies in proactive preparation and strategic partnerships. Here's how you can get ahead of the CNY rush and ensure a smooth supply chain during this critical period.

1.) Place Orders Early

• Ensure all orders are placed by early December 2024.
• Work with suppliers to confirm production schedules and guarantee that goods will ship before mid-January.

2.) Build Inventory Buffers

• Maintain at least a 6-8 week safety stock for critical items.
• This ensures continuity during the holiday and the recovery period that follows.

3.) Secure Freight Space in Advance

• Pre-book container space for both sea and air freight to avoid surcharges and delays.
• Explore alternative shipping routes through smaller ports to bypass congestion hotspots like Shanghai or Shenzhen.

4.) Diversify Shipping Modes

• Consider solutions such as air freight for urgent shipments.
• Air freight, while more expensive, can bypass sea freight bottlenecks.

5.) Communicate with Logistics Providers

• Stay in constant contact with your freight forwarders and carriers to monitor shipping schedules and potential delays.
• Discuss contingency plans for rerouting shipments if necessary.

The Tariff Threat: Preparing for Trade Policy Shifts

The potential for new or increased tariffs on foreign-made goods presents a significant challenge for shippers in 2025. These tariffs can drive up the cost of imports, disrupt established supply chains, and create uncertainty in the marketplace. Beyond the immediate financial impact, shippers often face freight rate volatility and capacity constraints as businesses rush to stockpile inventory ahead of tariff deadlines. Understanding these risks is essential for developing strategies to mitigate their impact and maintain a competitive edge.

1.) Increased Costs:

• Tariffs of up to 60% on Chinese goods could double import costs for many products, affecting everything from electronics to consumer goods.
• Broad-based tariffs on all imports could disrupt sourcing strategies beyond China.

2.) Freight Rate Volatility:

• Past tariff announcements have led to spikes in demand as businesses rush to stockpile inventory. This can further drive up ocean freight rates during peak periods.

3.) Supply Chain Realignment:

• Businesses may attempt to shift production to other countries like Vietnam, but these markets lack the capacity to fully replace China’s output.

Mitigation Strategies for Tariff-Related Risks

Tariffs not only increase the price of imported products but can also lead to supply chain disruptions as businesses rush to stockpile inventory ahead of policy changes. To navigate these challenges, shippers must adopt proactive strategies that mitigate risk and ensure continuity. From diversifying sourcing to leveraging advanced logistics solutions, here’s how you can prepare for and minimize the impact of tariff-related disruptions.

1.) Advance Shipments and Inventory Stockpiling

• Anticipate tariff changes by increasing imports before new policies take effect.
• Build up inventory in domestic warehouses to avoid immediate tariff impacts.

2.) Diversify Sourcing

• Shift production to countries with favorable trade agreements or lower tariffs.
• However, carefully assess the capacity and reliability of these alternative markets.

3.) Negotiate Supplier Agreements

• Work with suppliers to share the cost burden.
• Renegotiate contracts to secure better pricing or split tariff costs.

4.) Explore Domestic Production

• For some products, consider reshoring or partial reshoring (e.g., importing components and assembling domestically) to reduce tariff exposure.

5.) Leverage Financial Strategies

• Hedge against tariff impacts through financial instruments or pass on increased costs selectively, balancing pricing strategy with market competitiveness.

ILA Contract Negotiations: A Third Challenge for 2025

In addition to the challenges posed by Chinese New Year and potential tariffs, shippers must also prepare for a third significant risk: the unresolved contract negotiations between the ILA and the USMX. With the current contract set to expire on January 15, 2025, discussions have been contentious, particularly on the issue of port automation. Should these negotiations result in a labor action, East and Gulf Coast ports could face severe disruptions, triggering widespread delays and bottlenecks across the supply chain.

Why the ILA Contract Matters

• Port Disruptions: A labor strike or slowdown could bring port operations to a halt, delaying cargo and increasing congestion.
• Impact on Freight Costs: As capacity tightens, shippers may face higher rates and surcharges for rerouted or delayed shipments.
• Extended Supply Chain Delays: The recovery period after any labor action could stretch weeks or even months, leaving shippers scrambling to meet customer demands.

The Path Forward: Proactive Supply Chain Management

2025 presents a complex landscape for international shippers. By acting now, businesses can mitigate the risks associated with Chinese New Year and potential tariff hikes. Here’s a summary of key actions:

• Collaborate Early: Work closely with suppliers to secure production and shipping slots before CNY.
• Secure Freight: Lock in capacity with carriers to avoid costly delays.
• Diversify Supply Chains: Explore sourcing from alternative regions to reduce dependency on high-tariff markets.
• Monitor Policy Changes: Stay informed on trade developments and be ready to adjust strategies quickly.

To overcome the challenges of CNY and potential tariffs, businesses need to plan ahead and collaborate with experienced logistics partners. Averitt offers the tools, expertise, and integrated solutions you need to maintain a resilient and efficient supply chain.

How Averitt’s International Services Keep You Ahead

Navigating the complexities of international shipping requires a partner with the right expertise and capabilities. Averitt’s International Services are designed to help shippers stay ahead of challenges like Chinese New Year disruptions and tariff uncertainties. Whether you’re moving goods via Asia Express LCL ocean or air, or leveraging our general international air freight services, our team ensures your cargo reaches its destination on time, even during peak periods.

From customs clearance to final-mile delivery, Averitt offers a seamless, end-to-end solution. By utilizing our Distribution and Fulfillment Network, you can store inventory closer to your customers, mitigating delays and reducing costs associated with supply chain disruptions. Our integrated approach, combined with proactive communication and real-time visibility tools, allows you to maintain control and keep your supply chain resilient in the face of global uncertainties.

The Power of One

Averitt’s unique “Power of One” approach unifies our five core service units—LTL, Truckload, Dedicated, Distribution & Fulfillment, and Integrated & Global Logistics—into a seamless logistics solution. Whether you’re importing products or distributing them domestically, Averitt provides a single point of contact, simplifying complex supply chains and ensuring exceptional customer service.

From the ports to your customers’ hands, we handle every step of the journey with precision and care!

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