Ocean Freight 2025: Navigating Market Challenges

As we prepare to say goodbye to 2024 and welcome 2025, we continue to navigate ocean market uncertainties and challenges. 2024 was a very tough year for our customers as rates were high and services still not yet performed at their high standards and normalcy due to several disruptions that occurred. The outlook for 2025 is uncertain, with many factors to consider, such as the new administration in the USA, new carrier alliances such as Maersk and Hapag GEMINI, and the potential strike at U.S. East Coast ports in the middle of January 2025.

Labor Negotiations

After several months of negotiations to settle the pay increase between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) and finally come together to an agreement, both parties still have an impasse regarding the automatization of U.S. East Coast ports. This issue is becoming an obstacle to moving forward with the negotiations that have been extended till January 15, 2025. There is a considerable risk of another strike if both parties do not come to an agreement by the deadline.

Trade Lanes Update

Rates are generally still high despite some softening lately on the TPEB trade lane to the U.S. West Coast. Carriers are starting to lower rates, and space is open from most origins in Asia to the USA. On the export side, we are facing some void sailings and schedule disruptions. Rates to Europe are also low compared to other trade lanes. We might see an uptick in rates as we approach Chinese New Year in February 2025 and also due to TPEB contract negotiations that will start with BCOs in March and NVOCCs in April next year. Capacity, in general, will see an increase compared to 2024, but carriers will also scrap old vessels and equipment to make room for additional capacity that will come in 2025.

Gemini Alliance Launch

Maersk and Hapag will launch their alliance called Gemini on February 1, 2025, with seven trade lanes offering 59 services and about 300-340 vessels. Gemini is targeting a service performance of 90% reliability, which would be a significant improvement from the current market, suffering around 50% reliability!

NNR will closely monitor evolving circumstances to ensure seamless service for our clients. We greatly value your ongoing support and are committed to updating you on any new developments.

For more information or assistance, please get in touch with our team of expert consultants.