Market situation – container flows – December '24

Market/Trade Information

Asia

• Container spot rates from Asia to Europe have spiked due to an earlier Lunar New Year. This has pushed volumes upwards, as factories in Asia will close for nearly two weeks and they want to ship out as much as possible. This rate increase goes hand in hand with ongoing annual contract talks wherein the carriers, obviously, would like to close as high as possible. The uncertainty on the market does not help. Many in the market think that the increased rates are not going to last, whilst other are already hinting at a very strong month of January.

• According to data from Alphaliner, in the transpacific trade CMA has regained the position of market leader from Maersk. Both carriers have a market share of just over 13% each. COSCO comes in a close third with 12.9%. The current high market prices and lingering ILA discussion have drawn a lot of attention from other carriers who will try to get a bigger share on this trade.

• The ports of Shanghai and Ningbo are struggling with congestion. Both ports were hit hard by a typhoon last month and have seen a decrease in productivity. The operations are trying to catch up, but a backlog remains.

Indian subcontinent

• Port workers have threatened to lay down their tools indefinitely as of December 17th, if the government fails to implement wage revisions and productivity schemes before December 15th.

Europe/ Mediterranean / Black Sea

• The new FuelEU regulation will come into effect on 1 January 2025. This initiative was adopted by the European Commission to promote the use of cleaner fuels for vessels calling at any port in EU/EEA countries. The new ruling is part of the EU’s ‘Fit for 55’ package. FuelEU sets maximum limits for the yearly average greenhouse gas intensity of the energy used by ships calling at European ports. The FuelEU limitations are a requirement to reach for the carriers and, according to them, this will lead to higher operating costs. This will result in new, or increased, emission surcharges.

North and Central America

• President-elect Donald Trump is already impacting the international trade, as he announced via social media that he plans to impose tariffs immediately upon taking office. On Day 1, Trump intends to implement impose a 25% tariff on all products from Mexico and Canada, alongside a 10% tariff on products from China. This has caused a surge in volumes, as many exporters and importers want to move their cargo prior to potential hikes in tariffs.

• ILA – the US East Coast labor union, has re-uploaded their banner, “If it’s a fight they want, it’s a war they’re going to get.” on their social media pages which they use with their members. It is a clear sign that the union is committed to the hardline stance on no automation and, unless something changes, we are likely to see another strike come by mid- January.

• The Panama Canal Authority has introduced a new booking reservation system (the Long- Term Slot Allocation [(LoTSA])). This will be operational as from of Jan 1, 2025. In order to get slots confirmed, the carriers need to bid ion a sealed bidding process and the carriers already expect that this will lead to higher costs for each passage for next year.

• FMC halts Premier Alliance (YM, HMM and ONE) to go into effect as from of Thursday December 12th. The new alliance needs to provide extra information to the FMC to check on the potential competitive impacts of the arrangement. As long as the information is not provided and checked by the FMC, the Premier Alliance cannot be active on the service to and from the US. The commission of the FMC has 45 days from when they receive the information to determine whether if the new alliance can become effective. Until then, the Premier Alliance is forced to wait, and all schedules will be ‘subject to confirmation’.

 Latin America

• Two new cranes were delivered to the BTP terminal in the port of Santos, and the capacity of the terminal will increase by 25% making the quay much better equipped to handle larger vessels. The cranes are electrified and fit in the BTP’s carbon-neutrality goal for 2030. The cranes are scheduled to be operational by February 2025.

Red Sea and Gulf area

• We are close to day 400 in the Red Sea crisis. No real new developments and it seems the current situation accepted as a ‘new normal’ for the shipping industry.

• Syrian rebels have deposed president al-Assad, which is triggering yet another wave of instability in the region. The US has bombed Islamic State in Syria, and Israel also responded to incidents near the border. For the Syrian population it is uncertain which way the rebels will lead the country. The results for the time being are a rise in oil prices on the international market and the fleeing of al-Assad to Russia.

General information

• Future Trends in Maritime AI have been explored by Maritime Analytica (a container shipping intelligence organization) on how this technology can change the shipping industry on efficiency, safety and sustainability. They are convinced that all maritime stakeholders need to embrace AI to remain relevant in the future. The maritime AI market has tripled to $4.13 billion, and a 23% annual growth is projected over the next five years. AI is already used by carriers to determine and to adjust sea routes, and other logistics players are using AI to make predictive models on market trends.

These trends give the market changes on the spot market compared to 1 year ago, 3 months ago or 1 month ago.