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Container TEU-mile demand is expected to grow at a modest 2.4% in 2025 due mainly to the impact of US tariffs in global trade, according to Veson Nautical’s latest Shipping Market Outlook
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For the next three years, growth is seen to remain muted at an average of 3% annually
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The impact of US tariffs is coupled by “limited upside potential from Red Sea diversions as the extra sailing distances are already factored into current market dynamics”
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Freight rates have remained firm but a downtrend is expected starting 2026 as demand falls behind fleet growth
Container twenty-foot equivalent unit (TEU)-mile demand is expected to grow at a modest 2.4% in 2025 due mainly to the impact of US tariffs in global trade, according to Veson Nautical’s latest Shipping Market Outlook.
For the next three years, growth is seen to remain muted at an average of 3% annually, said the US-headquartered provider of commercial maritime software and services.
The impact of US tariffs is coupled by “limited upside potential from Red Sea diversions as the extra sailing distances are already factored into current market dynamics,” Veson said in a press release.
Freight rates have remained firm but a downtrend is expected starting 2026 as demand falls behind fleet growth.
Despite nearly 4.3 million TEU deliveries, freight rates have stayed firm throughout 2024 and early 2025, supported by carriers reducing average speeds by 2.3% to limit supply growth, though rates are forecast to decline steadily from 2026 onwards, Veson said in its Shipping Market Outlook: Q4 2025 Forecast.
It noted that net fleet growth averaged 5.5% in 2023 and 9.7% in 2024, with projections of 8.7% average growth between 2025 and 2028 driven by high ordering activity. On the other hand, container TEU-mile demand growth has remained more modest, thus creating a supply-demand imbalance.
A future supply surplus will result from strong ordering activity with approximately 3.3 million TEU contracted in 2025, and with around 10-million TEU entering the market over the next few years.
“A supply surplus is expected despite ongoing rerouting requirements from geopolitical disruptions,” Veson said.
Apart from geopolitical developments, global shipping markets are also affected by “structural disruptions” such as the European Union ban on Russian oil imports and the ongoing Suez Canal diversions that lengthen voyage distances and tighten vessel supply.
“These developments provide strong support for current freight rates. However, the market faces added complexity from a substantial shadow fleet transporting sanctioned crude and products from Russia, Iran, and Venezuela. These cargoes are primarily shipped to China and India, displacing demand for conventional tonnage,” Veson said.
“Any successful tightening of sanctions enforcement on this grey fleet operations represents a potential upside catalyst for non-sanctioned vessel earnings and future rate expectations.”
For tankers, geopolitical disruptions drive ton-mile demand while peak oil demand headwinds are emerging.
Transportation fuel demand is facing mounting pressure from engine efficiency improvements, electrification trends, fuel switching initiatives, and structural changes like remote work adoption, which signal slower demand growth in the future.
The bulker market, meanwhile, is currently in healthy balance after years of low fleet growth paired with steady demand, resulting in solid freight rates throughout the year despite global economic uncertainty and subdued demand growth.
Veson cited that while iron ore and coal volumes are expected to decline, longer-haul trades, particularly the new Guinea-China iron ore route from the Simandou mine opening, combined with ongoing Red Sea diversions are boosting ton-mile demand and supporting market strength.
For gas, growth in US and Middle East exports are driving supply. US LPG production grew around 4.5% with export growth of 10.9% in 2024, whilst Middle East exports rose 6.5% despite oil production cuts, with several terminal expansions and LNG projects expected to further boost export capacity through 2028.
