-
There is cautious optimism on demand growth of the ocean freight market this year with many uncertainties impacting the container shipping market, according to DHL’s Ocean Freight Market Update 2025
-
The latest report noted significant uncertainties remaining, such as alliance reorganizations, growing geopolitical tensions, impact of the US elections and protectionism, among others
-
The report puts forward some recommendations, including considering ‘what if’ scenarios to stay flexible while also building inventories and alternative routes to markets
-
Freight rates are not expected to return to pre-pandemic levels
There is cautious optimism on demand growth of the ocean freight market this year with many uncertainties impacting the container shipping market, according to DHL’s Ocean Freight Market Update 2025.
The latest report noted that the container shipping sector has been disrupted for four years, with significant uncertainties remaining, such as alliance reorganizations, growing geopolitical tensions, impact of the US elections and protectionism, port workers’ strikes, increasingly complex and costly regulatory environment, and the climate crisis.
Due to these factors, freight rates are not expected to return to pre-pandemic levels, the report pointed out.
While there is cautious optimism on the demand growth globally, the report noted there are diverging pictures from region to region.
The potential US policy shifts are seen to create mid-term uncertainty, probably impacting China, Mexico, and Canada due to higher tariffs.
Despite record high new vessel orders, effective supply growth will slow, with up to 87% of current carrier orders are replacements, limiting available capacity.
The Red Sea crisis is also lasting longer than expected, further squeezing capacity, the report said.
Port and hinterland infrastructure are the bottlenecks and will continue to be so.
Service disruptions are also anticipated during the transition to new alliances, which will reshare East-West trades in the first quarter.
Regulatory rules, particularly those of the International Maritime Organization and the European Union that push for emissions reductions and use of more sustainable fuels and technologies, are increasingly complex and costly.
Moreover, weather related disruptions add to uncertainties.
The report, published in late December, noted the risk of strikes on the US East and Gulf coasts if no agreement is reached by January 15 between the International Longshoremen Association (ILA) and the United States Maritime Alliance, Ltd. (USMX). On January 8, though, ILA and USMX announced they have reached a tentative labor agreement for a new six-year Master Contract, subject to ratification, averting any work stoppage on January 15 when the previous contract expires.
READ: ILA, USMX sign tentative labor agreement, averting port strike
Still, the report noted potential strikes in other regions.
Amid the uncertainties, it recommended considering “what if” scenarios to stay flexible while also building inventories and alternative routes to markets.
It also suggested balancing between short-term and long-term shipping contract commitments, and spreading volume across alliances and carriers while also considering building in mode flexibility.
In addition, it recommended allowing for sufficient lead times in case of disruptions and backing support electronic data exchange as “increased visibility is key.”
Other suggestions included selecting sustainable logistics offerings to offset increased regulatory cost while also employing flexible sourcing strategies.
The report noted that resilience though comes at a price so accepting a different rate set up than the past would be beneficial. – Roumina Pablo
