Another early peak season
According to the latest data from Container Trade Statistics, the traditional peak season of 2024 on the major shipping routes came to an end in September. Global container transport, measured in TEUs, declined by 6.1% compared to August.
However, this should not be seen as a weakening of the market but merely as a seasonal decline. In September 2024, a total of 2.3% more containers were transported compared to 2023. More importantly, demand, measured in TEU*Miles, is 18% higher than last year, primarily due to the crisis in the Red Sea.
Looking ahead, it is important not only to anticipate an early start to the peak season leading up to Chinese New Year in January 2025—this peak season has, in fact, already begun. Spot rates for transport from Asia to Europe, which had been steadily declining for three months, have risen sharply since early November. Similarly, the drop in trans-Pacific freight rates has come to a halt.
Why such an early peak?
This is the result of a combination of factors. For instance, ships operating on the Asia-Europe trade route are still frequently sailing around Africa, leading to longer supply chains. Additionally, schedule reliability remains low. In September, only 51% of ships worldwide arrived on time, while this figure was even lower on the Asia-Europe routes, with just 48% punctual arrivals. This forces importers to build extra buffer time into their supply chains.
In the Pacific Ocean, other factors come into play. There is significant uncertainty surrounding a potential new strike on the US East Coast on 15 January 2025, prompting importers to expedite shipments wherever possible. Furthermore, there is uncertainty about new tariffs that the incoming Trump administration may impose. Some US importers have already started advancing shipments in recent months to minimise the potential impact of these measures.
Additionally, there is a self-reinforcing effect. When some importers advance shipments, this drives up spot prices. This increase forces other importers to also bring forward their shipments to avoid even higher rates, thereby creating the very price surges they are trying to circumvent.
In the Atlantic region, spot prices also rose at the end of October. This trade route could be similarly affected by a potential new strike on the US East Coast in January, which may lead to further advancements of shipments.
The shipping industry is preparing for stricter environmental regulations
As we gradually enter 2025, container carriers will increase environmental surcharges for shipments to and from the EU due to two new factors:
- Emissions Trading Scheme (ETS): The ETS, introduced in 2024 with a phased implementation of 40%, will rise to 70% in 2025. As a result, ETS-related surcharges will almost double.
- FuelEU Regulation: These new rules require carriers to reduce CO2 emissions by 2% in 2025, which will largely necessitate the use of more expensive biofuels. This will result in new environmental surcharges for cargo destined for the EU.
Challenges in 2025
At the start of 2025, changes in shipping alliances are also scheduled, coming into effect on 1 February. These changes are expected to cause irregularities in departures and arrivals until the new networks are fully operational. This may prompt some shippers to bring forward their freight planning to anticipate potential disruptions.
Another important consideration in the context of the incoming Trump administration is the progress of decarbonisation in the shipping sector. Various shipping companies have pressured the International Maritime Organization (IMO) to implement a global taxation system on fossil-based shipping fuels. Such a system would narrow the cost gap between fossil fuels and green alternatives, thereby accelerating the development and production of sustainable options. However, with a Trump administration in power, it is unlikely that the US would support a decarbonisation agreement, especially if it is perceived as a threat to American economic interests.
