Market situation – container flows – January '25

Market/Trade Information

Asia

• Pre-Chinese New Year demand has slowed, resulting in low utilization of vessels and a softening market. Some void sailings were announced in response, but it will be only post-Chinese New Year that we can assess the impact. Although current rate levels are still in favor of the shipping lines, the decrease in rates is going at a speed wherein it is unclear if it is linked to lower volumes or to a fight for market share between carriers and big NVO’s. The new alliances are being implemented and several players in the market are taking a position to overcome expected hurdles and to overcome possible longer periods of less cargo.

• On the Trans-Pacific route, the carriers still aim to land much higher contract rates this year. The market on the Trans-Pacific route seems to be around 25% higher than the same period last year. In contrast to the Asia-Westbound route, the Trans-Pacific is much more ‘under control’ from a capacity and rate level point of view.

• Maersk and Hapag-Lloyd have announced their joint-Intra-Asia shuttle services which include at least 10 services: 4 Northeast Asia to Southeast Asia, two East Asia dedicated shuttles and 4 dedicated Southeast Asia services. In addition to their Gemini-cooperation, the two carriers are introducing other cooperations, outside of their alliance.

Europe/ Mediterranean / Black Sea

• CMA CGM will introduce a new Med-Black Sea loop, linking Piraeus and Istanbul with Odesa in Ukraine. They are the second mainline operator to return to Ukraine after MSC.

• The European Union’s member states have extended the sanctions against Russia for another 6 months.

North and Central America

• HMM returns to the Trans-Atlantic-Trade route for the first time since leaving in 2018. HMM will buy slots on the service operated by ONE calling Southampton, Le Havre, Rotterdam, Hamburg, Antwerp, Miami, Cartagena (Col), Balboa, Los Angeles, Oakland, Caucedo, and Southampton. This service is the only weekly direct connection between North Europe and the U.S. West Coast.

• The ILA, representing the longshoremen, and the US Maritime Alliance, representing ports and carriers, have agreed on a framework to introduce new technologies without jeopardizing any ILA jobs. An agreement was already reached in October with regards to wage increases, but no agreement had yet been made on the automation in ports. The new framework would permit semi-automation such as automated cranes; a fully automated system will not be allowed. Known as the ‘Master-contract’, the new framework will last for the next 6 years.

 Latin America

• Carriers have returned to the port of Manaus in Brazil on the Amazon River as a result of higher water levels following a long period of drought in the region. Most carriers suspended scheduled calls at Manaus from October due to low water levels. Floating container facilities at Itacoatiara, located around 100 miles downstream, as well as Vila do Conde (to transship containers onto river barges to and from Manaus) act as alternatives.

• Panamanian officials have said they will not give rate reductions to the US on the Panama Canal, nor will they give up control of the waterway, after President Donald Trump made several threats to re-take control of the passage. Trump accused the Canal’s authorities of being subject to Chinese interference which is incorrect information. The only possible link to China is the Hong Kong based CK Hutchison that manages container terminals via its subsidiary, PCC, at both entrances to the Canal in Balboa and Cristobal.

Red Sea and Gulf area

• On January 15^th, a six-week-period ceasefire was reached between Israel and Hamas. For the shipping industry, no impact has yet been felt. Yemen’s Houthi rebels have said that merchant vessels, apart from Israeli-owned or Israeli-flagged units, may use the Red Sea again without having to risk an attack from them. Any change in the ceasefire or any military action by the U.S. against Yemen could however ignite the situation again. Therefore it is expected that shipping lines will only very gradually re-route via the Red Sea and Suez Canal. Apart from safety considerations for personnel, assets and cargo, the insurers need to give the ‘ok’ to return. The best case scenario is a careful return during the second half of February. Also, the diversions around the Cape of Good Hope are not what the industry wants, but the situation is stable and is manageable. It has taken many months, with the necessary issues, to come to this stability so carriers will be reluctant to head back to the Red Sea too soon. Therefore, an immediate large-scale return is highly unlikely.

• With the new alliances, new services between Asia and Middle East are announced. The Premier alliance will operate a service calling at Tianjin, Qingdao, Busan, Shanghai, Ningbo, Kaohsiung, Shekou, Singapore, Jebel Ali, Dammam, Umm Qasr, Jubail, Hamad, Abu Dhabi, Jebel Ali, Sohar, Port Kelang, and Hong Kong. The service will have 6 x 16,000 TEU ships of HMM and 3 other vessels operate by ONE (not yet nominated).

General information

• Cape diversions save liner shipping from overcapacity in 2024. The global container fleet increased by 10.6% in 2024 compared to 2023. This resembles an almost 3Mteu increase in slots to the fleet. 59% was absorbed by the Asia-Europe-trade, where many additional ships were needed to compensate for the longer transit times via the Cape of Good Hope to avoid the dangerous passage through the Red Sea are. When comparing the growth in fleet vs the weekly capacity offered on the route, you see the impact of the longer transit. The fleet grew by +30% whereas the capacity grew by just below 9%. The current low idle container ship fleet (0.6%) emphasizes the need for capacity although the market is not strong on the major volume trades.

• 2025 is the year of the first major alliance-free carrier. MSC has invested in its fleet to have the size to operate out of any alliance. MSC has a current fleet capacity of 6.3 Mteu, making them the biggest operator. To compare, the world’s second operator, Maersk, operates 4.4 MTeu. To overcome this gap, they will join in the Gemini cooperation with Hapag-Lloyd who operate a fleet of 2.3 MTeu. It is clear that Hapag is being ‘pushed’ by Maersk to grow to become a more equal partner. Hapag grew their fleet by almost 19% in 2024.

• China’s COSCO group added to US ‘blacklist’. The U.S. Department of Defense added Cosco and CIMC (the group’s container manufacturer) to the 1260H list which contains ‘Chinese Military companies’. Being mentioned on this list does not mean any real restrictions, but it is an attempt to dissuade U.S. companies from doing business with companies on this list. From the maritime sector, Sinotrans, one of the largest Chinese logistics companies, is also on this list along with several shipyards and shipbuilding corporations. The Cosco group firmly denies that it has any links to the Chinese military.

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