2025 Tender Analysis

For example, from the Far East to North Europe, current spot rates have a premium of USD 2 400 per FEU between spot and long-term rates, whereas from North Europe to the Far East, there is just a USD 10 per FEU difference, with long-term rates slightly more expensive than spot.

Looking at the new rates for 2025, the spread between spot and long-term rates on the fronthauls will not suddenly drop as we enter 2025. While shippers will be happy to avoid facing a 100%+ increase in long-term rates, they should keep in mind potential risks posed by a high spread. Risks include cargo being rolled – which many shippers experienced in the first half of 2024, as carriers prioritized containers that were being moved on the much higher spot market.

Being vigilant is especially important when you consider that within the first month of 2025, the container market faces strike threats on the US East and Gulf coasts, tariffs threats and an early Chinese Lunar New Year, all while major carriers continue to avoid the Red Sea. A good relationship with a supplier may prove more valuable than focusing solely on getting the lowest possible rate.

Another observation from round one bids is there seems to be a tendency for incumbent carriers – those who currently hold contracts for a shipper’s volumes on that trade to be aiming high when it comes to initial offers, while these same carriers have proved much more competitive on trades where they are hoping to gain new volumes.

Significant differences between round one and contracted rates

Round one rates are the starting point for negotiations and once these have concluded, shippers will choose their supplier(s) and rates will be finalized. This year, early data suggests a considerable discount between round one bids and contracted rates can be achieved on many trades.

On 11 of Xeneta’s top 13 trades, round one bids are higher than the current long-term market, with premiums rising up to over USD 1 000 per FEU. However, looking at contracted rates, only six trades still have higher rates than prevailing long-term rates, and these trades also seeing significant drops compared to round one.

For example, between the Far East and Mediterranean round one rates have gone from being well over USD 1 000 per FEU higher than current long-term rates to just USD 300 higher. From the Far East to North Europe the contracted rate is within USD 40 per FEU of current long-term rates.

Another big drop between round one and contracted rates can be found from North Europe to the US East Coast, where contracted rates are on average USD 650 per FEU lower than round one bids. This is similar to the development on the other trans-Atlantic fronthauls, the Mediterranean to the US East Coast and North Europe to the South American East Coast, with contracted rates falling to or slightly below the current prevailing long-term rate, after coming in at much higher levels in round one.

There are also substantial discounts achieved during the tender process on the backhaul trades from North Europe and the Mediterranean to the Far East and the US East Coast to the two European regions. Across these four trades, contracted rates are on average USD 300 per FEU lower than in round 1. A substantial drop on trades where total contracted rates are between USD 400 20 and USD 1 200 per FEU.

Year-on-year developments vary by trade type

For many, the key result of the tendering process is their spend compared to 2024 levels. Here too the outcome will vary by trade, with rates on the main fronthauls out of the Far East seeing substantial increases compared to a year ago, in contrast to backhaul trades where rates in mid-December are flat, if not lower than they were at this time last year.

Early data on the Far East to Europe trends shows that looking at comparable rates, prices for 2025 are following the same trend as long-term rates have in 2024, with rates to North Europe rising by more than those to the Mediterranean. However, the increase in rates for 2025 is a fraction of what market average long-term rates have increased by over the past year.

For context, long-term rates from the Far East to the Mediterranean are up 37% from mid-December 2023, while those into Europe are up a much higher 114%. This means that while rates into North Europe were lower than those to the Mediterranean in December last year, North Europe now has the higher rates, a switch that is also reflected in contracted rates for 2025.

Shippers running annual tenders with rates starting in Q1 or early Q2 are likely still paying lower rates into North Europe than the Mediterranean when importing from the Far East. That said, they shouldn’t be surprised to see this shift in their 2025 rates, and should perhaps consider adjusting their networks to benefit from the comparatively lower rates into the Mediterranean.

The same analysis for comparable contracts on the fronthaul trades across the Atlantic shows much smaller changes, with a flat development between North Europe and the US East Coast, and a small drop out of the Mediterranean. This is in line with the development on long-term rates on this trend, with 2025 rates here lower than the average long-term rate in both December 2023 and 2024.

More year-on-year savings can be found on the backhaul trades from North Europe, the Mediterranean and the US West Coast into the Far East. Here contracted rates for 2025 are all lower than the current average long-term rates, with shippers able to enjoy a far less pressured situation on backhauls than during the pandemic when equipment shortages pushed rates up on these backhauls.