When looking ahead to 2025, there can be no sugar-coating the likelihood of it being another challenging year in ocean container shipping.
If 2024 has been a year framed by conflict in the Red Sea, then expect more of the same because there is no sign of a political resolution that would allow a large-scale return of container ships to the region.
This only heightens the danger for container shipping because there is little slack in the system to deal with another supply chain shock.
The Xeneta Ocean Outlook 2025 makes clear the impact diversions around Africa have on TEU-mile demand and available capacity in the market. New deliveries of ships and slowing TEU-volume growth will ease some of this burden, but not enough to mitigate another major incident.
Could we see a military escalation in the Taiwan Strait? Will regime change in Bangladesh cause further unrest? Will the situation in the Middle East deteriorate to impact shipping in the Persian Gulf? The lights are flashing red on the geo-political dashboard and it would be a foolish to ignore them.
Other factors must be added into the mix.
The potential for new US tariffs on Chinese goods could see a spike in freight rates and shippers rushing to frontload imports. Will we see continued demand growth from China to Mexico as a ‘back door’ into the US? The threat of further strike action at ports on the US East Coast and Gulf Coast in January also looms large.
Another one to watch is how shippers, freight forwarders and carriers react to the new alliances as they are rolled out in Q1 2025.
Spot markets have been softening on major fronthauls out of the Far East since peaking in July, which is good news for shippers ahead of new long-term contract negotiations. However, it will not take much to push the needle back into the red alert zone and the logistic markets to spiral once again.
One factor working in shippers’ favor is that they have access to more data and insight than ever before. This means they can closely monitor freight spend on individual corridors and benchmark carriers against schedule reliability, capacity, transit times and CO2 emissions.
2024 has been a bruising year for shippers and they will hope 2025 brings some relief - but it is important to be realistic and prepare for further disruption.
The Xeneta Ocean Outlook 2025 will highlight the key themes and risks to consider in the face of ocean container shipping market uncertainty so you can keep supply chains moving, manage budgets effectively and maintain good supplier relationships.
Xeneta's global average spot rate has softened since peaking in July as the long term market begins to rise.
The narrowing of the long-short market will be of great significance ahead of negotiations for new long term contracts in 2025.
Shippers will be hoping the markets narrow further while carriers are doing their utmost to keep the spot market elevated.
Source: www.xeneta.com
Meet the authors:
Peter Sand
Chief Analyst
Xeneta
Emily Stausbøll
Senior Shipping Analyst Xeneta