The Merchant · n°134 · February 13, 2025

Trump Gaza plan rekindles fears of Houthi strikes

🚢 We are in a strange soft patch
🌀 The Red Sea, a mirage?
✈️ E-commerce: the American muddle

Figure of the week

183 million TEU Or more precisely 183,158,193 TEU: this is the world container traffic recorded in 2024, up 6.2% year on year, according to Container Trade Statistics (CTS). Traffic between Asia and North America and on the Asia-Europe trade rose by 13% and 12% respectively.

Quote of the week

“Customers are all eager to go back (through the Red Sea), but they have one reservation: they don’t want constant back-and-forth.” Vincent Clerc, CEO of Maersk, quoted by JOC.

After the CNY, the soft patch of maritime shipping

As the Chinese New Year (CNY) ends, maritime shipping shows no sign of recovery toward Europe. Even if the forecasts for the end of winter are uncertain, the Asia-Northern Europe trade seems to be heading toward an apathetic post-CNY period. Last week, the various indexes all recorded sharp declines in spot rates on this route (from -5% for the WCI up to -16% for the SCFI). “The market is fairly unanimous in saying that the first half of the year will be quite weak in terms of demand,” indicates Héloïse Roux, maritime expert at OVRSEA. The market in the Western Mediterranean is, however, holding up better for the moment. Spot rates from Asia are stabilizing there in a singular way. The rate gap between the two trades has moreover widened sharply (+1,100 USD/FEU in favor of Asia-Med, according to the WCI).

On the major east-west trades, one must nevertheless expect spot rates to fall in the coming weeks. The Loadstar mentions “an intensification of the rate war on the Asia-Europe trades,” against a backdrop of weakened demand. Will the carriers eventually activate blank sailings to slow the fall in rates? Nothing is certain. The latest figures from Drewry indicate on the contrary that they should cancel few crossings in the coming month. The blank sailings rate reaches only 7% between February 10 and March 10, with cancellations that concern the transpacific trade for half of them.

What about the Transatlantic? The market is waiting for the new tariffs targeting European goods. While CMA CGM and MSC announce PSS (Peak Season Surcharges) for March, others (such as Gemini Cooperation) tend to pull rates downward. A two-faced market is taking shape, complex to anticipate. Expert Lars Jensen points to a recent and sharp drop in rates from Northern Europe (here too, the Mediterranean is holding up better). A positive note in the picture: the latest Global Port Tracker (GPT) reveals a certain optimism on the part of American retailers. An increase in imports is anticipated, particularly in March (+11.1%). The imminence of tariffs against the EU could well create a draft effect and stimulate, temporarily, maritime flows on the Atlantic.

In brief. CMA CGM is launching a new Med Pendulum service (MPS). Starting in March, the MPS service will adopt the following rotation: Salerno, Genoa, La Spezia, Barcelona, Casablanca, Leixoes, Setubal, Valencia, Barcelona, Marseille, La Spezia, Genoa, Salerno, Piraeus, Beirut, Mersin, Alexandria and Salerno. It will last 42 days.

The return via the Red Sea: a mirage in the desert?

The recent threats made by Donald Trump against Gaza and Hamas, as well as the tensions reported around the ceasefire protocol, push away the prospect of a durable easing in the region, and therefore of the return of ships to the Red Sea. In Yemen, the Houthis have warned that they would only halt hostilities if the war in Gaza is satisfactorily resolved. Except that two phases still remain before reaching a durable ceasefire, and their chances of succeeding seem slim.

The carriers promise nothing. Crossings via the Red Sea and the Suez Canal will not resume before the month of May (at the earliest), the chairman of Yang Ming declared, for example. MSC does not expect a return to normal before at least the second half of the year. Premier Alliance has stated that it would be the last to consider a passage via Suez. Vincent Clerc, the CEO of Maersk (see also above), reminded that the carriers had to wait for guarantees of long-term stability so as not to expose themselves financially and operationally.

For the moment, CMA CGM is the only major carrier to send a few ships back through the Red Sea, although this is essentially limited to the services serving Lebanon, Linerlytica specifies.

What is certain is that the strong instability of the region continues to influence the market. Still according to Linerlytica, forward contracts experienced a sharp rise last week, against a backdrop of renewed uncertainty on the Gaza side.

Chinese e-commerce: the chaotic reverse gear of the United States

One of the latest jolts of the trade war initiated by Donald Trump reminds us how abrupt, uncertain and poorly prepared the decisions of the new American administration are, which generates incredible instability for the entire sector. Because after suspending the de minimis rule for imports of Chinese parcels, Washington had to backtrack in the face of chaos at the airports. The customs and postal services were not prepared for such a turnaround: two-thirds of the four million parcels affected by the de minimis exemption arriving each day in the country come from China, of which probably 30% from the Shein and Temu platforms. The application of this decree is postponed, the time for the services to adapt. This perhaps offers a reprieve to Chinese e-commerce, but it is only a matter of time. Many are now wondering about the impact that such a measure will have on air freight. Some believe the impact will be major, leading to a collapse in demand and prices on the transpacific market. For others, the end of the de minimis rule will not prevent Americans from continuing to import Chinese parcels, even if prices rise.

While waiting to learn more, air freight is entering its low season. Activity from China has not completely resumed. During week 5, the tonnages transported between China and Europe melted by 28% over one week, but rates remained stable, according to WorldACD. On the Transpacific, Baltic Air Freight estimates that “the concerns raised by tariffs have pushed rates down,” which reflect “a weakening of e-commerce-related demand.”

On the other hand, activity on the transatlantic trade remains sustained in the Europe-United States direction, “an unusual situation at this time of year. High-value industrial shipments are maintaining strong demand,” analyzes the Baltic Exchange Air Freight Index. The schedule adjustments of the airlines have moreover reduced the available capacity. According to OVRSEA, the congestion between the two shores should persist until the end of March.

👋 See you next week, The Merchant team

Sources

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