First 32 days of 2025 to test shippers, forwarders: Xeneta
Businesses will also be looking to navigate changing consumer demands, cyber threats, & rising insurance premiums.
In the first 32 days of 2025, shippers and freight forwarders will face the following:
* January 1: 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;
*January 15 – The end of the ILA port strike action suspension;
*January 20 – Inauguration of U.S. President Donald Trump, prompting the introduction of new and higher tariffs;
*January 24 – Russia and Ukraine will have been at war for 35 months;
*January 29– Start of Chinese Lunar New Year with factory shutdowns, demand and rates rising ahead of it, and supply chain disturbances expected until mid-February; and
*February 1 – 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, says the latest update from Xeneta.
Five things to watch:
China to North Europe
November 1, 2024 saw spot rates on the China to North Europe and the Mediterranean trade lanes jump around $1,000, reversing the recent softening, the update added. "We've seen two additional spot rate increases – one in mid-November and the second on December 1.
"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 the Far East to the U.S."
US market outlook
While spot rates from China to the U.S. East Coast have flattened, long-term rates have since reached $4,250 per FEU, with potentially more disruptions ahead, the update added.
“Don’t make any mistakes that the storm has passed," says Peter Sand, Chief Shipping Analyst, Xeneta. "There is something boiling beyond the U.S. 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 fair to say that there’s a number of dominoes lined up, which may fall against your liking.”
U.S.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, the update added.
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 U.S. East Coast have seen a slight decrease, caution is advised as new contract negotiations are under way."
With strike action in the U.S. a very real possibility from mid-January, shippers using the Transatlantic route will need to consider a contingency plan if they rely heavily on the U.S. East Coast and Gulf Coast ports, the update added. "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 International Longshoremen's Association (ILA) initiated a three-day strike."
Demand, supply and capacity dynamics
With 2024 drawing to a close, demand growth is expected to settle at 4.5 percent for the full year, which is much higher than the underlying economic activity would suggest, the update added. "This indicates frontloading is taking place to build up inventories, which should begin to neutralise next year, dropping TEU demand growth to a predicted three percent in 2025."
With the looming threat of tariff wars between the U.S., China, Mexico, Canada and the EU, there is likely to be much higher volumes into the U.S., 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 U.S. 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."
2024 has seen 2.34 million TEUs delivered in the first nine months, more than in any full year previously, the update added. "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."
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. While container 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 decarbonisation of the fleet."
While securing a competitive freight rate remains essential, recent supply chain crises have elevated the importance of resilience. This has seen more shippers prioritising vendors with proven transit reliability, decarbonisation, advanced tracking technologies and contingency plans, the update added.
