According to Drewry, shippers, freight forwarders and air/sea freight companies do not expect any kind of change in the market in 2025, which should be the 5th year in a row of extreme volatility in rates.
Air cargo’s peak season is getting underway, with rates increasing from an e-commerce-elevated floor. Ocean rates remain well above normal levels as Red Sea diversions continue to absorb capacity.
And with an early Lunar New Year approaching, a renewed ILA strike looming and possible freight ramifications from US election results, the ocean freight market continues to face significant uncertainty.
AIR FREIGHT
The difference in the average air freight rate seen in November from the Asia Pacific region, compared to the same period a year ago, according to WorldACD, is 25%.
The rise of Chinese e-commerce and a slight modal shift from sea to air seem to have smoothed out demand (which remains very high over a year) over a wider period, which could explain why there is not an intense and short peak but a slow rise, against a backdrop of a new pricing context.
Spot rates are elevated globally and are up 25% year on year (YoY) out of Asia Pacific, in particular, as the fourth quarter peak season continues.
SEA FREIGHT
Asia-Europe carriers saw their early December general rate increases (GRI's) stick, with spot rates into both North Europe and Mediterranean ports seeing double-digit increases.
The container shipping industry has experienced a remarkable turnaround in the third quarter of 2024, with total net income soaring to $26.8 billion, marking a staggering 164% increase from the previous quarter.
The impressive growth trend, which began in the first quarter of 2024, has been primarily fueled by capacity tightening in the Red Sea region and strong global demand.
According to most experts, demand looks set to be strong in December, with ships already full to Europe.
The trend towards a strong market until the Chinese New Year is forecasted.
From February 2025, restructured carrier alliances will give the global sea freight market new momentum.
Maersk and Hapag-Lloyd will cooperate under the alliance label ‘Gemini’, while the ‘Ocean Alliance’ will be represented by the carriers OOCL, CMA/CGM, Cosco Shipping and Evergreen.
The ‘Premier Alliance’ represent the cooperation between ONE, HMM, and Yang Ming.
The carrier MSC (Mediterranean Shipping Company) largely operates independently while maintaining slot-sharing agreements with the Premier Alliance and Zim.
With this reorganisation of the alliances, various new operational models and business approaches will impact the market, with the aim of increasing the stability and reliability of sailing schedules, transit times, and service frequencies.