The Merchant · n°138 · March 13, 2025

Rates plummet as shippers cease front-loading

🚢 A new crisis in the Red Sea...
🇪🇺 European carriers riding high
✈️ A dark day at German airports

Figure of the week

$20,000,000,000 The investment planned by the CMA CGM group in the United States over the next four years.

Quote of the week

“We will resume our attacks against the Israeli enemy.” On Friday, March 7, Abdul-Malik al-Houthi, leader of the Houthi movement, threatened to resume his attacks in the Red Sea if humanitarian aid was not delivered to the Gaza Strip.

No spring in the Red Sea

On Monday, March 9, the Sounion, a Greek tanker that had been attacked by the Houthis a few months ago, crossed the Suez Canal to return to Greece. But this image is a trompe-l’oeil, since the situation remains extremely tense in the Red Sea. On Friday, March 7, the Houthi leader issued an ultimatum to Israel, setting a four-day deadline to lift the humanitarian blockade on Gaza. Otherwise, the Yemen-based group would resume its attacks on Israeli ships and those of countries identified as allies of the Hebrew state.

Caution is more necessary than ever for carriers in an unpredictable geopolitical environment. Under these conditions, Ambrey, a company specializing in maritime security, therefore recommends that all carriers verify their status relative to the Houthis’ target profile. For his part, Lars Jensen, founder of Vespucci Maritime, emphasizes that the situation would continue to benefit small carriers, while global carriers are forced to circumvent an extremely risky zone.

Even before this new crisis, the main players in international maritime trade remained very cautious. A few days before the incendiary statements of Abdul-Malik al-Houthi, Soren Toft, CEO of MSC, stressed at TPM25 that “security could not be guaranteed as long as the ongoing agreements in the Middle East remained uncertain.” It must be acknowledged that he was right.

478 days after the start of the crisis, there is still no calm in sight in the Red Sea.

The United States, a special partner for carriers

“The CMA CGM Group is strengthening its long-standing relations with the United States thanks to this historic $20 billion investment!” declared Rodolphe Saadé on Thursday, March 6, after unveiling an investment plan in the United States for the next four years. This notably includes tripling the US-flagged fleet, from 10 to 30 vessels, and developing port infrastructure on the East and West coasts - notably in New York/New Jersey, Los Angeles, Houston, Miami, and even Dutch Harbor in Alaska. Investments in air freight are also planned. The stated objective is to create 10,000 jobs and durably strengthen partnerships with American authorities and customers.

At the same time, MSC concluded a major deal in Panama by partnering with BlackRock through its Terminal Investment Limited (TiL) arm. The plan is to buy back nearly 80% of Hutchison Port Holdings’ overseas assets for $22.8 billion. This notably includes the strategic terminals located near the Panama Canal, a nerve center in Donald Trump’s strategic offensive against China.

Indeed, these announcements come as the American President has multiplied his pressure on the maritime sector - notably threatening to heavily tax carriers holding Chinese-built vessels. The announcements by CMA CGM and MSC could therefore be seen as an American victory. But on closer inspection, European carriers are largely coming out ahead. As Lars Jensen wrote: “The increased control of key hubs, notably thanks to the buyback of the Panamanian terminals, could reposition MSC at the top of the ranking of global terminal operators” - an analysis confirmed by Linerlytica.

That is no small thing, and these announcements also illustrate how the economic players in the maritime sector can navigate the geopolitically very rough waters of 2025 - and profit from them.

A warning shot at German airports

The week is going to be difficult in German transport, and it began on Monday with a massive strike at airports. In a context of heated wage negotiations, workers at 13 airports, including the major hubs of Frankfurt and Munich, took part in a warning strike - a common tactic of unions across the Rhine - ahead of negotiations scheduled for mid-March. The strikers are demanding, among other things, an 8% wage increase - that is, at least 350 euros more per month - as well as better bonuses and more rest days.

These demands, deemed “unacceptable” by employers, led to the cancellation of 2,600 flights, according to Flightradar24 data. As always in Germany, the strike was very well followed, leading for example to the total closure of Hamburg airport. The conflict comes amid a very uncertain political climate: Germany is looking for a coalition to form a new government in a context of economic crisis that has been wearing down the country for two years.

While air carriers such as Lufthansa Cargo have announced their intention to put in place measures to minimize the damage, concern remains the day after the strike: if negotiations fail, what will be the repercussions of a prolonged conflict on the entire national and European economy, particularly at a time when political stability is at stake? The question is all the more pressing given that this is not the only labor dispute affecting European freight: the month of March also looks set to be extremely difficult in the port of Le Havre, while Sweden and Belgium experienced strikes in February and March… For once, Germany is therefore in tune with the continent.

👋 See you next week, The Merchant team

Sources

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