As we enter the last month of 2024, the market developments are somewhat mixed.

Spot rates are strengthening on the Asia to Europe markets. The growth in weekly offered capacity compared to last year is quite significant and hence the strengthening of rates indicates a solid demand boost to support it. This falls well in line with the expectation of an earlier ramp-up towards the usual pre-Chinese New Year peak owing to the longer sailing times around Africa.

Conversely, the Pacific market appears to remain somewhat subdued. Rates to US East Coast have mainly flatlined with rates into US West Coast continuing its downwards trend. In this context, it should be noted that there is a sizeable injection of capacity into the Asia to US West Coast trade. According to data from Sea-Intelligence, the last week of November saw capacity to US West Coast grow 14% while the first week of December saw a 25% growth in capacity year-on-year.

Operationally, there is not any improvement. Reliability statistics for October shows that only 51.5% of all deep-sea vessels globally arrived on time. This is in line with the overall level seen throughout 2024 where reliability has been fluctuating in a relatively narrow band between 51-56%.

Operationally, there is not any improvement. Reliability statistics for October shows that only 51.5% of all deep-sea vessels globally arrived on time. This is in line with the overall level seen throughout 2024 where reliability has been fluctuating in a relatively narrow band between 51-56%. It is unlikely to improve in December and January 2025 as most of the global carriers – except those in Ocean Alliance – will be more focused on preparations for the phase-in of the new alliance networks in February 2025.

Hapag-Lloyd was the first carrier to announce that bookings were now opened in the new Gemini Corporation with Maersk. Shippers should expect quite some turbulence in the networks and services offered from February until the new networks are fully phased in. In particular, February-March is likely to see many changes compared to what shippers were expecting as it is not an operationally easy feat to phase hundreds of vessels into entirely new strings.

However, the concern over another US East Coast strike would lead to US importers partially booking cargo from mid-November to be able to get their cargo delivered prior to a potential strike. As such, this will place spot rates under pressure to US East Coast from mid-November. 

However, the concern over another US East Coast strike would lead to US importers partially booking cargo from mid-November to be able to get their cargo delivered prior to a potential strike. As such, this will place spot rates under pressure to US East Coast from mid-November. At the same time, they might redirect some of their cargo booked from mid-December onwards to go via the US West Coast instead to avoid a potential strike, which will place US West Coast spot rates under pressure.

On top of this, the continuing deviation around Africa due to the Red Sea crisis will mean the usual peak from Asia to both Europe and to US East Coast (for services going round Africa) will begin two weeks earlier than normal at least, meaning already as we enter December.

There is always a seasonal drop in spot rates following Chinese New Year, which this time falls on 29 January 2025. However, due to the phase-in of the new alliance networks, the drop might be more significant than usual as carriers might prioritise the phase-in of vessels over seasonal blank sailings, as well as prioritise maintaining their market share during the transition.

There is always a seasonal drop in spot rates following Chinese New Year, which this time falls on 29 January 2025. However, due to the phase-in of the new alliance networks, the drop might be more significant than usual as carriers might prioritise the phase-in of vessels over seasonal blank sailings, as well as prioritise maintaining their market share during the transition. Should shippers see a large drop, they should not take this as a sign of overall weakness for full year 2025 – it should be seen as temporary.

The situation in the Red Sea essentially remains unchanged, with global carriers diverting around Africa. CMA CGM attempted to shift their INDAMEX service going from India to US East Coast to a Suez routing, although this was dropped again based on significant negative push-back from customers. The beginning of December saw yet another attack on merchant vessels by the Houthies and thus we should not expect a shift anytime soon – the new alliances are also implementing their round-Africa services and not the Suez routed networks.

In the United States, President-elect Trump has announced 25% tariffs on goods from Mexico and Canada, as well as 10% additional tariff on all goods from China when he assumes office in January. This is likely to cause some front-loading of cargo. In fact, some of this has already happened even prior to the presidential election by shippers wanting to get ahead of the curve.

About Lars Jensen, CEO, Vespucci Maritime

Lars is a leading expert and thought leader in analyzing global container shipping markets. Lars has 20 years’ experience hereof the last nine within multiple companies he has founded, with the main focus as CEO of Vespucci Maritime.
 

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