The ocean freight market is experiencing rapid changes. Carrier operations are at peak capacity, with minimal vessel downtime. Vessel scrapping is at an all-time low, while new vessel orders are hitting record highs. The coming months may bring a "perfect storm" of events. Here’s an overview of critical developments:
- Rates from Asia to Europe and Mediterranean ports remain high after consistent increases over the past three months.
- Despite initial fears of a shipping surge from Asia, rates to North America have begun rising by over 10%.
- The approach of Lunar New Year (January 29) is driving a shipping rush, particularly from China.
- U.S. East Coast labor contracts are set to expire on January 15, posing a strike risk.
- New tariff threats on China-to-U.S. shipments could take effect on or after January 20.
- Red Sea and Suez Canal disruptions continue to force vessels to reroute around Africa, impacting transit times and capacity.
Regional Insights
Asia to Northern Europe
- Demand: Remains strong, with congestion reported at Northern European ports.
- Spot Rates: Up nearly 50% in the last two months, with contract rates for 2025 settling 30% higher than 2024 levels.
Asia to the Mediterranean
- Spot rates have surged by approximately 60% over the past two months.
- 2025 contract rates are showing significant increases compared to 2024 agreements.
Asia to U.S. / North America
Expecting an increase in blank sailings in early January. Contract issues for the U.S. East Coast (see below) present a high risk.
East & Gulf Coasts
- Spot rates are climbing, up 8% in recent weeks after a stagnant period since early October.
- With the high likelihood of a longshoremen strike at U.S. East and Gulf Coast ports, shipping volumes out of China and South Korea are increasing.
- Shipments not already en route are unlikely to arrive before labor contracts expire on January 15.
- Alternate routings to the West Coast or other options will likely encounter congestion and delays.
West Coast
- Spot rates have risen 10–12% in the short term.
Carrier Alliance Updates
- Major changes to alliance structures and service strings are ongoing and will continue through Q1 2025.
- Operational disruptions are expected across most alliances, with the exception of the Ocean Alliance.
- Premier Alliance has postponed some planned service string changes until later in the first half of 2025.