In the first 32 days of 2025, shippers and freight forwarders will face the following:
- 1st January – The Red Sea Crisis will reach more than 400 days of disruption, with a large-scale return of container ships to the region looking unlikely
- 15th January – The end of the ILA port strike action suspension
- 20th January – Inauguration of Donald Trump, prompting the introduction of new and higher tariffs
- 24th January – Conflict between Russia and Ukraine will have been at war for 35 months
- 29th January – Start of Chinese Lunar New Year, with factory shutdowns, demand and rates rising ahead of it, and supply chain disturbances expected until mid-February
- 1st February – Gemini and the Premier alliances come into effect, and with that, the dissolution of THE alliance and 2M
On top of these events, businesses will be looking at ways to navigate changing consumer demands, operation costs, cyber threats, failing shares, and rising insurance premiums – among other things.
With so much market uncertainty, how can you make informed procurement decisions?
Peter Sand and Emily Stausbøll tackled this question in the recent 2025 Ocean Freight Outlook: Navigating Capacity Shifts and Rate Dynamics webinar.
Here are the top five takeaways from the 30-minute session:
1. China to North Europe
1 November saw spot rates on the China to North Europe and the Mediterranean trade lanes jump around $1,000, reversing the recent softening. Since the webinar, we’ve seen two additional spot rate increases – one in mid-November and the second on 1 December. Stausbøll shared that she was ‘surprised to see carriers push through GRIs at this rate, and to see them stick’.
Despite some weaknesses, these GRIs have stuck, showing a general upward direction for the overall spot market on these trades. Seeing as these are two of the trades setting the dynamics for the market, this is an interesting shift to watch as it could give an indication of how rates may develop on other trades, such as Far East to the US.
2. US market outlook
While spot rates from China to the U.S. East Coast have flattened, long-term rates have since reached USD 4 250 per FEU, with potentially more disruptions ahead. As Sand mentioned on the webinar:
“Don’t make any mistakes that the storm has passed. There is something boiling beyond the US Presidential election. Come January, there is a potential strike around the corner, and only a week later we will have Trump’s inauguration, followed by the Lunar New Year a week after that. It’s a fair to say that there’s a number of dominoes lined up, which may fall against your liking.”
US importers who have goods/materials that can be stored and access to warehousing will in all probability bolster inventories to help navigate this period of uncertainty. But Sand warns;
“If you’re considering shipping more than your contracted allowance, be aware of the long-short market spread. The bigger the spread, the likely it is for carriers and shippers to act in a way that is different to what you would otherwise expect. We saw shippers have their cargo rolled during the peak this summer (spread of $6,000), as well as earlier in the year, because the spread back then between the short and long market reached 3,000 dollars per FEU”.
3. The Transatlantic
The Transatlantic westbound is an interesting trade as it tends to move with a lag – sometimes up to two quarters behind the top four trades, which is what we witnessed in September and October 2024.
With this in mind, while long-term and spot rates from North Europe to the US East Coast have seen a slight decrease, caution is advised as new contract negotiations are under way.
As Stausbøll notes:
“November and December aren’t high times for new long-term contracts entering validity. A lot of contracts are being signed around now to come into effect 1 January, so the rates we’re seeing today might not necessarily be what you should expect to happen if you’re going into tender negotiations.”
With strike action in the US a very real possibility from mid-January, Stausbøll also touched upon the fact that shippers using the Transatlantic route will need to consider a contingency plan if they rely heavily on the US East Coast and Gulf Coast ports. While imports from the Far East will have the option of going through the West Coast, shipments from Europe will have a tricker situation to contend with – including spot rate increases similar to those seen in October, when the ILA initiated a three-day strike.
4. Demand, Supply and Capacity Dynamics
With 2024 drawing to a close, TEU (Twenty-Foot Equivalent Unit) demand growth is expected to settle at 4.5% for the full year, which is much higher than the underlying economic activity would suggest. This indicates frontloading is taking place to build up inventories, which should begin to neutralize next year, dropping TEU demand growth to a predicted 3% in 2025.
That said, with the looming threat of tariff wars between the US, China, Mexico, Canada and the EU we are likely to see much higher volumes into the US, particularly from China as shippers attempt to import goods ahead of tariffs coming into effect. As we saw in the second half of 2018 – during Trump’s first term as President – tariffs increased spot rates more than 70 percent from China to the US West Coast.
There is no reason why shippers shouldn’t expect a similar response from the market this time around, but Trump’s trade policy will be highly unpredictable.
When considering supply of container shipping capacity, 2024 has seen 2.34m TEUs delivered in the first nine months, more than in any full year previously. As Sand comments:
“fleet growth of 10% in 2024 is a 16-year high. But the Red Sea disruptions and the following longer sailing distances and transit times, neutralized the effect of supply growth outpacing that of demand. Looking ahead, 2025 will see supply growth outstrip demand growth too.”
MSC is the carrier expecting the highest inflow of new tonnage, with 582 000 TEU of container shipping capacity scheduled for delivery in 2025* in the form of 46 new ships (source: Clarksons). These deliveries will extend MSC’s status as the globe’s largest carrier, with the new deliveries adding to its current market share of 20%. This will afford it the scale to attempt a non-alliance approach from 2025.
With major changes to alliances in 2025, shippers should carefully consider their carrier and alliance choices to ensure reliable service and coverage for their global needs.
Gain more insights in the 2025 Ocean Outlook Report (chapter 4).
5. Emissions and Regulations
Trades particularly impacted by the Red Sea saw a significant increase in carbon emissions throughout 2024, with Far East to Mediterranean hit hardest. As Stausbøll noted during the webinar:
“In an effort to get ships back to port quicker, carriers were increasing shipping speeds where they could. Longer sailing distances at higher speeds had a direct impact on emissions, with the Far East to Mediterranean fronthaul producing emissions per tonne of cargo 60.1% higher compared to 12 months earlier.”
While containers ships continue to avoid the Red Sea, this impact will continue.
In terms of setting the framework needed for upcoming regulations, 2025 is an important year for the International Maritime Organization (IMO). It must make some important decisions when it comes to a global carbon emissions price, as well as short-term measures and medium-term measures to support decarbonization of the fleet.
As Stausbøll noted in the 2025 Ocean Outlook report:
“The industry has a collective responsibility to work towards net zero, but it seems it has become less of a priority during the chaos of 2024 – perhaps if 2025 brings calmer waters to the market we will see carbon reduction given a higher priority.”
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