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The Merchant · n°150 · June 12, 2025

Temporary relief in air cargo roller coaster ride

Figure of the week

13% After the introduction of tariffs, container imports into the United States fell 13% year-on-year according to Container Trade Statistics.

Quote of the week

“Unbalanced rules would penalize the pioneers rather than encourage them.” Rodolphe Saadé, CEO of CMA CGM, speaking about carbon pricing in a text published on the occasion of the 3rd United Nations Ocean Conference (UNOC).

A peak season under high tension

Rates are soaring as summer approaches. On one side, structural effects are at play: strong demand linked to preparations for the year-end holidays must be reckoned with. On the other, there is the spreading epidemic of port congestion. After Europe, it is now the turn of the major Asian ports: in Shanghai, the average waiting time is about 5 days; in Singapore, transshipments can sometimes exceed two weeks of waiting.

In this context, carriers have applied new rate increases (GRIs) that appear to be holding, especially as everyone wants to take advantage of the tariff truce between the United States and China. These increases — sometimes higher than 30% — concern the Asia-Europe and trans-Pacific routes, where ships are fully booked several weeks in advance. Peter Sand, chief analyst at Xeneta, clearly sums up the situation: “Carriers are responding to rate increases with urgency, in the hope of taking advantage of the tariff window before it closes again.”

The proliferation of Peak Season Surcharges (PSS) further weighs on rates. They apply on top of GRIs and aim to capture the profitability of the high season. CMA CGM has already announced PSS on routes to the Mediterranean and Northern Europe. Other carriers should soon follow suit. This increased rate pressure from carriers is also due to the economic climate: it is a consequence of the reduction in available capacity, due to a redeployment of ships toward the more lucrative trans-Pacific route.

In short, this increase is cyclical. It is due above all to the tariff moratorium between China and the United States. And the situation could change abruptly. Opened on Monday, June 9, the negotiations in London between Washington and Beijing promise to be tense, as the Chinese brandish the threat of retaliation on rare-earth exports. These statements worry two key sectors for the Trump administration: automobiles and new technologies. Anxiety also grips Europe: several suppliers, such as Magnosphere in Germany, have warned of an imminent risk of production shutdown. Indeed, if China were to slow export licenses, it is the entire Western industrial chain that would falter. Even though Donald Trump appeared optimistic before these discussions, the situation remains extremely precarious. And global supply chains remain on the front line.

CMA CGM’s gamble in the Red Sea

For two weeks, CMA CGM has seemed to lean in favor of a partial return to the Suez Canal. On May 27, the Marseille-based group announced the reintegration of this route on its MEDEX service linking India, the Middle East and the Mediterranean. On June 7, a vessel from its fleet, the Palleas, left Nhava Sheva and is expected to pass through the canal three weeks later. Two others will follow, expected in early July. Cosco, a partner on this service, confirms this strategic realignment.

Management remains cautious, speaking of a “permanent readjustment at this stage,” but this move nonetheless fits into the context of the truce between the United States and the Houthis, which we told you about in late May. More generally, for a year now a gradual return of traffic to the Red Sea has been noted: +60% since August 2024. Ultimately, the temporary 15% discount on transit fees offered by the Egyptian Canal Authority must have weighed in the decision.

Will this stirring open the way for other shipowners? For now, Maersk says it does not have enough confidence to resume its activity in this zone. The same reservation applies to other carriers. All consider the cease-fire to be vague, especially as the Houthis still consider themselves at war with Israel. CMA CGM’s return could therefore be isolated, at least as long as security guarantees have not been strengthened.

Despite a good month of May, a difficult landing ahead

The month of May offered an unexpected respite to air freight: according to Xeneta, demand rose 6% year-on-year, even as capacity fell 2% and the load factor remained stable at 57%. This upturn is due to the economic climate. It is driven by the increase in urgent shipments after the temporary suspension of tariffs between the United States and China. For Niall van de Wouw, head of air freight at Xeneta, “this surge is more an effect of logistics panic than a real signal of recovery.” That said, the average rate per kilo fell 4% year-on-year. This is a signal that the market remains rather fragile.

Despite the turbulence to come, as tariff negotiations are far from over, air freight retains an essential place. As Dan Morgan-Evans, global director at Air Charter Service, points out, the current difficulties of global trade should benefit the “heavylift” segment — which refers to the transport of exceptional loads often vital for sectors such as energy or cutting-edge technologies. Why? Well, the scarcity of giant aircraft like the Antonov AN-124, added to the growing demand for renewable energies, makes this mode of transport more strategic than ever.

Eliska Hill, vice-president at Air Partner, sums up the situation quite clearly: “The market is tight, but there will always be situations where only the aircraft can do the job.” Reasons for hope, then, for a sector under strain.

Saving the oceans on the Riviera

For its third edition, the United Nations Ocean Conference (UNOC) is being held in Nice from June 9 to 13, 2025. It brings together 64 heads of state or government and more than 12,000 delegates. This summit aims to mobilize the international community against the alarming degradation of the oceans, against global warming, plastic pollution, overfishing and deep-sea exploitation. The goal is to accelerate the implementation of the High Seas Treaty, whose ratification by 60 states would allow it to enter into force. Other commitments are also expected on the creation of marine protected areas, the regulation of undersea mining activities or the limitation of bottom trawling. This event also received the support of maritime-sector professionals, notably Rodolphe Saadé, CEO of CMA CGM.

👋 See you next week, The Merchant team

Sources

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