New tariffs, geopolitics and overcapacity: The container market faces challenges
Date：2025-02-27 09:03:00 View：
According to the data of Container Trade Statistics (CTS), the global container traffic in 2024 increased by 6% compared with 2023, continuing the trend of global trade recovery after the epidemic.
However, the freight market has shown a complex situation of "volume increase and price decline". China's export Container Freight Rate Index (CCFI) shows that the annual average in 2024 is 1556.03 points, a significant increase of 66.01% from 937.29 points in 2023.
However, it is worth noting that this increase was mainly concentrated in the first half of the year, since the Lunar New Year after the global container ship rates continued to decline. The SCFI index of the Shanghai Shipping Exchange fell for six consecutive weeks, of which the freight rate from the Far East to the United States fell by $5,000, a weekly decline of as much as 12.11%, the largest weekly decline since 2023.
In response to the plight of the continuous decline in freight rates, the world's major shipping companies have taken action. Maersk, Hapag-Lloyd, CMA, HMM and other leading shipping companies have announced tariff adjustment plans to push up freight rates in March.
Among them, Maersk announced an increase in Asia-Europe route freight rates of $1,000 /FEU from March 15, and CMA CGM plans to implement a surcharge of $800 /FEU on US-West routes by the end of March. However, the current container market is still full of uncertainties, and the future freight rate will be affected by multiple factors:
Tariff policy adjustment and trade conflicts intensified
The new tariffs that the United States is about to implement could have a significant impact on global trade patterns. The Trump administration plans to announce tariffs on automobiles, semiconductors, chips, pharmaceuticals, lumber and other key goods in March or earlier, with tariffs on autos and parts potentially as high as 25 percent.
This policy will not only directly affect Sino-US trade, but may also trigger countermeasures from major economies such as the European Union. It is worth noting that data from the US Department of Commerce show that in 2024, China's exports to the US of mechanical and electrical products, medical equipment and other products may be greatly affected, which account for more than 45% of China's total exports to the US.
The continuing impact of geopolitical conflict
The impact of the Red Sea crisis on the global shipping industry continues. Although the parties have reached an initial ceasefire agreement, major shipping companies remain cautious. Maersk, CMA CGM, Evergreen Shipping and other operators have made it clear that they will not resume Red Sea routes until the situation in the Middle East is completely stabilized.
According to Drewry Shipping Consulting company estimates, the Cape of Good Hope will increase the Asia-Europe route by about 3,500 nautical miles, extend the transit time by 10-14 days, and increase the cost of a single container by about 15-20%. It is widely expected that ships will continue to circle the Cape of Good Hope until at least August 2024.
Overcapacity and alliance strategy adjustment
Global container capacity is expected to grow by 6.1% in 2025, but market demand growth may slow to about 4.5%, and the imbalance between supply and demand may lead to pressure on freight rates.
According to the latest Alphaliner data, as of February 21, 2025, there were 7,265 container ships in operation worldwide with a total capacity of 31,797,677TEU and an operating tonnage of 376,969,994 deadweight tons. Among them, more than 12,000 TEU of super large container ships accounted for more than 40%, these ships are mainly deployed in the Asia-Europe route.
More importantly, the container shipping alliance will usher in a major restructuring in 2025. The new shipping Alliance structure will form three major camps: Gemini Alliance (Maersk, Hapag-Lloyd), Ocean Alliance (CMA, COSCO Shipping, Evergreen, OOCL) and Premier Alliance (HMM, ONE, Yangming).
In addition, MSC will continue to operate independently. This restructuring will redefine the competitive landscape of major routes such as Asia-Europe, Asia-America and trans-Atlantic. According to shipping analysts, the new alliance could start a new round of price competition in the second quarter of 2025 to compete for market share.
Looking forward to 2025, there is still great uncertainty about whether the consolidation market can continue the growth trend of 2024. In addition to the above factors, the pace of global economic recovery, energy price fluctuations, and the implementation of new environmental protection regulations will affect the market direction.
It is suggested to focus on the following aspects: First, pay close attention to the changes in the trade policies of major economies, especially the implementation details of the new tariff policy of the United States; Secondly, we should follow the development of geopolitical situation, especially the security situation in the Red Sea region.