Trades Review: Asia to Europe & the U.S.

  • Asia to Northern Europe: Rates are trending lower but remain higher than a year ago for both contract and spot rates. While spot rates have typically been higher, both have been closing the gap and declining recently.
  • Asia to the Mediterranean: Rates saw significant increases in spring and summer but are now returning to last year's levels. Both spot and contract rates are trending flat or lower, though carriers are expected to increase blank sailings to limit capacity and maintain pricing.
  • Asia to U.S. East & West Coasts: Rates for both coasts have been following a similar pattern. Spot rates were higher mid-year but are now aligning with contract rates, though still a bit higher than last year. Carriers may implement additional blank sailings to stabilize or increase rates on these lanes as well.

Ocean Market Considerations

Top Ten Carriers & Alliance Changes: The top ten carriers now control close to 85% of the global container market, with the top four alone making up about 65% of that share. These carriers have increased market dominance each year since 2000. Recently, the main alliances have restructured:

  1. MSC - operating independently.
  2. Gemini Alliance - a new partnership between Maersk and Hapag-Lloyd.
  3. Ocean Alliance - remains unchanged, with CMA-CGM, Evergreen, and COSCO/OOCL.
  4. The Alliance - now smaller, operating without Hapag-Lloyd.

These changes are altering services, transit times, and capacity, with adjustments expected to continue through the next quarter. To navigate this shifting landscape, build your data resources, reevaluate terms, and set clear expectations. While carrier leverage strengthens, focus on developing strong partnerships, negotiating effectively, and leveraging information to optimize your ocean strategy.

  • Red Sea Route Adjustments: While some carriers are using the Suez route more frequently, most continue to route around Africa for Europe and Americas East Coast trades, avoiding the Panama Canal. This situation is likely to persist into 2025.
  • Lunar New Year Surge: Lunar New Year on January 29 may lead to a shipping surge in December. While some years do not see a significant rush, prepare for higher demand and potential congestion.

U.S. East Coast & Gulf Labor Contracts, Tariffs

  • Labor Negotiations on the U.S. East Coast & Gulf Ports: Contracts are still under negotiation, with a potential strike risk mid-January. Expect an uptick in volumes in early December to avoid potential disruptions. Ports on the U.S. West Coast and in Canada may see additional volume as shippers hedge against East Coast uncertainties.
  • Tariff Increases: The EU’s new tariffs on electric vehicle imports from China may have minimal impact on container volumes. In the U.S., tariffs on various Chinese imports rose earlier this year, with more increases expected on select products in January 2025. China plans to respond with tariff increases on U.S. and EU goods. Shippers should consult trade compliance experts to understand product-specific impacts.