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The Merchant · n°132 · January 30, 2025

Carriers dash shippers’ hopes of swift Red Sea return

Figure of the week

4.8 days This is the average delay of containerships worldwide, during the last quarter of 2024, according to eeSea. On the Asia-Northern Europe trade, the punctuality rate has remained stable for six months, while it has improved by 1.7 days toward the Mediterranean.

Quote of the week

“If we stick to seasonality, rates should continue to fall over the next eight weeks.” The prediction of expert Lars Jensen, on LinkedIn, regarding the strong ongoing decline in spot rates on the Asia-Northern Europe trade.

Enter the CNY: rates tumble toward Northern Europe

The fall is impressive: the World Container Index lost 19% in one week between Asia and Northern Europe. The big slamming of the brakes for the Chinese New Year (CNY), which begins this Wednesday in China, is glaring. “The signals of a nascent rate war (…) seem to be confirmed,” the media outlet The Loadstar even goes so far as to write. In February, the new maritime alliances will indeed enter the arena. Ahead of the WCI, the latest Shanghai Containerized Freight Index (SCFI) shows, however, a more moderate decline in rates (-6%) on the Asia-Northern Europe route. It would seem that the CNY, the ceasefire in Gaza and the immense commercial uncertainty caused by the return of Donald Trump have abruptly cooled the market, especially toward Europe. According to Lars Jensen, this ebb in spot rates could last another 7 to 8 weeks.

Alongside this, the CNY has caused its share of operational disruptions: “In many Chinese ports, it is very difficult to access the terminals, most of the truckers have gone on vacation and will return on February 12,” observes Héloïse Roux, maritime expert at OVRSEA. The ports of Shekou and Ningbo seem particularly affected. To make matters worse, on the European side, the passage of storms Éowyn then Herminia is impacting various services to or from Northern Europe, in particular Rotterdam and London (according to Maersk).

In brief. Beware, strikes are disrupting the port of Le Havre. The CGT Federation of Ports and Docks has announced 15 days of mobilization at the port of Le Havre, against the pension reform. A 48-hour work stoppage is due to take place on January 30 and 31, followed by several 4-hour walkouts until Friday, February 28, in particular on January 29, as well as on February 4, 6, 10, 12, 14, 18, 20, 24, 26 and 28. It is possible that the movement will spread to other French ports.

Return to Suez: the shipping lines are in no hurry…

This risks being the suspense series of this start of the year: when will the carriers return to the Red Sea and the Suez Canal? The least one can say is that caution dominates everywhere for the moment. Since last week, no shipping line has ventured to put forward a date, or even an approximate horizon. The recent release of the crew of the Galaxy Leader, detained by the Houthis since November 2023, has not changed the situation.

Maersk states that it would continue to send its ships via the Cape of Good Hope as long as safety is not ensured over the long term off the coast of Yemen. While evoking a “hope for peace,” CMA CGM announces for its part that it is maintaining the circumnavigation of Africa. However, the company mentions possible adjustments “on a case-by-case basis depending on safety and global operational conditions.” The door is opening slightly… very cautiously. With an unconvincing optimism, the director of DP World, the Emirati port operator, estimates for his part that ships not linked to Israel could start using the Red Sea again within two weeks… while admitting it is difficult to provide a precise timetable. Finally, Egypt, which has lost a lot financially since the beginning of this crisis, declares itself “cautiously optimistic.”

Conclusion: with a situation that remains explosive in Israel, Palestine and Gaza, the return via the Red Sea still looks like a mirage. To be continued…

Will we see air freight rates fluctuate strongly in 2025?

From China, air freight has entered its usual CNY lethargy. Before that, last week, the global tonnage of air freight increased by 8% over one week, after the 29% jump the previous week, to be put into perspective however since it followed the 35% drop observed during the last week of December. WorldACD wanted to put into perspective the fears of a loss of momentum in air freight raised by some players: “The overall decline this winter is not significantly greater than last winter,” the air analysis company recalls. For its part, Expeditors observes that e-commerce remains “the most influential element” and that it should experience a recovery after the CNY.

However, a fundamental slowdown of air freight activity on the United States side is possible. And for two reasons:

The general level of retail sector stocks is very high across the Atlantic, according to official data relayed by Sea-Intelligence. Retailers have massively stocked up, apparently in anticipation of a strike in the East Coast ports and of the future tariffs of the Trump administration.

Donald Trump fully intends to attack the de minimis system, which allows exempting from tariffs items of a value below 800 USD shipped to private individuals. The Chinese e-commerce giants Shein, Temu or AliExpress would be strongly penalized.

Overall, in the United States as in Europe, it is to be feared that the year 2025 will be particularly volatile for air freight. Its growing dependence on e-commerce, in a highly uncertain and changing environment, risks amplifying the yo-yo effect of the rate curve.

Decarbonizing maritime shipping despite Trump? The IMO believes in it

The International Maritime Organization (IMO) has stated that the implementation of a fuel standard and a carbon pricing mechanism for global maritime shipping by the fall should not be called into question by the return of Donald Trump. “We continue to work with all our members,” an organization representative told the Journal of Commerce. A greenhouse gas emissions pricing mechanism could see the light of day. The legal text of the mid-term measures is due to be approved at the next meeting of the IMO’s Marine Environment Protection Committee (MEPC), in April. This should allow the implementation in October of an international fuel standard and of the carbon tax mechanism. The IMO has been trying for a few years to avoid regional divergences on the question, while the European Union has decided to implement its own strategy, in order not to lose time.

👋 See you next week, The Merchant team

Sources

Go further

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