Container transport caught in uncertainty
For the time being, there appears to be no end in sight to the sharply fluctuating market conditions in container shipping. Any form of stability still seems a long way off.
Let us begin with the development of freight volumes. The most recent data come from Container Trade Statistics and relate to containers loaded in the month of September. The figures reveal a clear divide: North America is being negatively affected, while the rest of the world is performing strongly.
When we look at total freight volumes to and from the US in September, both imports and exports, we see a 5% decline compared with the same month last year. At the same time, freight volumes in the rest of the world, excluding North America, grew by 8.6% over the same period.
Global transport routes are moving in divergent directions
When we dive deeper into the figures, we see that freight volume on the trans-Pacific route from Asia to North America has fallen by 7.8%, while at the same time it has risen by 13.7% from Asia to Europe. But Europe is certainly not the fastest-growing market for Asian exports. The absolute frontrunner is the route from Asia to Africa, with growth of 35.2%, followed by the Indian Subcontinent at 22.5% and South America at 19.5%
The Atlantic shipping routes are also being affected by the trade war. European exports to North America fell by 4.5%, while European imports in the opposite direction increased by 5.6%.
The Atlantic route is an imbalanced market segment: around twice as much cargo moves from Europe to North America as the other way round. This means that the ‘strength’ of the market is determined mainly by European westbound exports.
As mentioned earlier, freight volumes on this route fell by 4.5% in September. At the same time, significantly larger container vessels have been deployed on the Atlantic route. MSC has adjusted its sailing schedule and is now operating several vessels of up to 15,600 TEU, both from Northern Europe and the Mediterranean.
By comparison, the average vessel size on the Atlantic route is around 6,000 TEU, with only occasional ships ranging from 10,000 to 14,000 TEU.
The deployment of these new, much larger vessels is the result of adjustments within MSC’s network, with certain services from Asia to Europe continuing across the Atlantic. This increases capacity on the Atlantic route while simultaneously reducing the unit cost per ‘slot’ on these ships. Both factors are putting downward pressure on prices.
Falling rates and growing capacity on the Atlantic route.
The most recent spot rate data from the WCI rate index show record-low westbound rates since the index was launched in 2012, except for a few months at the end of 2023, just before the Red Sea crisis.
Looking ahead, several factors point to continued uncertainty and volatility. The US trade war continues to evolve, not only through import duties but also via other measures such as port fees and export controls on specific goods, to name just a few examples. This makes it particularly difficult for shippers to draw up robust long-term plans. The outcome is a far more volatile freight market, driven by short-term decisions, which in turn increases the likelihood of sudden bottlenecks in supply chains.
China and the US have, in essence, agreed on a temporary ceasefire in the trade war, but the underlying political issues have not been resolved, they have merely been postponed by twelve months. Looking at the actual developments in the US trade war over the past eight months, there is little evidence to suggest that the new agreement will truly remain unchanged throughout the entire twelve-month period.
Despite the challenges in the US, the American consumer has been remarkably steadfast in maintaining typical levels of goods and services consumption in 2025. The question is whether this will continue as we move towards the peak Christmas season. A sudden decline in consumer spending could lead to a sharp drop in freight volumes and, consequently, to overcapacity on vessels.
On the other hand, Trump’s latest idea, a $2,000 cheque for every American, could potentially trigger an unexpected spike in freight volumes. But it is highly uncertain whether such a payout will materialize. The result is an extremely uncertain and volatile freight market environment.
The IMO process and future regulation
Finally, a few reflections on the failed process within the IMO to introduce a global levy on the use of fossil marine fuels, known as the Net Zero Framework (NZF).
At the mid-October meeting, where a decision had been expected, it became clear that pressure from the US had taken effect: the decision has now been postponed by twelve months. Optimistically, this is merely a one-year delay. Realistically, however, it could mark the end of the NZF, or lead to a diluted version of it which, in practice, would be an entirely different agreement.
It now seems more likely that individual countries or trading blocks will introduce their own initiatives. In the EU we already have ETS and FuelEU, which could potentially be tightened. Other countries, such as China and Japan, may also introduce measures in the form of levies on emissions from the maritime sector. This would quickly create a complex landscape of differing regulations, with the risk of overlapping, and therefore double payments, across multiple countries.
In such a scenario, carriers would respond by introducing new surcharges to cover these costs, and the growing complexity would make it impossible for shippers to gain a true understanding of how these costs relate to the new surcharges.
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