Moody’s forecasts a significant slowdown in total container cargo volume growth at rated ports in 2025, with potential risks from proposed tariffs, labor strikes, and cybersecurity threats. However, the cruise sector continues to show promise as a revenue driver.
Economic Factors and Risks Impacting Port Operations
Moody’s projections suggest that total container cargo volume at rated ports will experience a sharp deceleration, growing by only 2% in 2025 compared to the 9% growth expected for 2024. This slowdown is attributed to a softening economy and weak consumer spending, despite a strong start to 2024 with cargo volumes increasing by an average of 11% in the first eight months.
Potential risks to port operations include the incoming president’s proposed tariffs, which could range from 10% to 60% on imports, potentially reducing trade and leading to a decline in cargo volumes. Additionally, the threat of a labor strike starting January 15 at East and Gulf Coast ports could further disrupt operations. Cybersecurity threats also pose a significant risk, with recent breaches at several ports, including the Port of Seattle, prompting Moody’s to raise the port sector’s global cyber risk profile to “high risk.”
Cruise Sector Continues to Drive Revenue Despite Challenges
Despite the challenges, the cruise sector is expected to remain a significant revenue driver for certain ports. Bookings for 2025 and 2026 are exceeding historical levels, with higher prices compared to this year, particularly benefiting Florida ports and the Port of New Orleans. Although cruises make up less than 10% of overall port revenue, their importance is material for these regions, especially with younger consumers drawn to the relative affordability of cruise vacations.
In Moody’s warning that the overall outlook for the port sector could turn negative if economic conditions lead to a significant decline in cargo volume. However, if cargo growth surpasses expectations and exceeds 3%, the outlook may shift to positive. Will the port sector be able to navigate these turbulent waters and come out on top? Only time will tell.
