Europe
Asia Pacific
North America
South America
Middle East
South Africa
Summary of the ocean freight market update in February
On 7 February, 2025, the International Longshoremen’s Association Wage Scale Committee unanimous approved to the new USMX-ILA Master Contract, paving the way for the ratification vote by ILA rank-and-file members on 25 February 2025.
The Trump administration is proposing fees on the use of China’s commercial ships, which it says could help counter the country’s maritime dominance. The Office of the US Trade Representative outlined a plan for fees on Chinese-built ships that transport traded goods as well as mandates requiring a portion of US products to be moved on US vessels.
CMA CGM commented recently on the Red Sea situation: "Latest developments in the region suggest progress towards greater stability, which is a positive but fragile sign for the global shipping and logistics industry. Yet, the safety of our seafarers, vessels, and our customers’ cargo remains the CMA CGM Group’s utmost priority. Given the ongoing tensions and associated risks for commercial vessels in certain areas, CMA CGM will for time being continue to prioritize alternative routes, including a significant reliance on passage via the Cape of Good Hope".
Energy Price - February 2025
The International Energy Agency modestly raised its forecast for global oil-demand growth and said improved compliance with output quotas among members of the OPEC+ alliance is reducing a projected supply surplus in the market. The organization now estimates global demand to grow by 1.1 million barrels a day this year from 1.05 million barrels a day previously, reaching a total of 104 million barrels a day on average.
20 January 2025 = 79.94 USD
20 February 2025 = 76.48 USD
- "The global shift away from coal remains challenging, largely driven by rising demand in Asia, even as Europe and the U.S. see significant declines in coal consumption", said Dorothy Mei, project manager for Global Energy Monitor’s Global Coal Mine Tracker.
- Global coal demand is expected to have breached another fresh record high of 8.77 billion tonnes in 2024, and will remain at similar levels until 2027, the International Energy Agency predicted.
- Deutsche Bank on 15 January indicated Brent crude prices could potentially rise to 87 USD - 90 USD per barrel if Russian oil production is disrupted by 1 million barrels per day over Q2 to Q4, potentially inflating oil prices.
Ocean freight trends - Europe
- Continuing decline in spots rates from Asia to Northern Europe.
- Year on year rates Northern Europe to China have decreased by 45%.
- Strike action in Rotterdam and Le Havre is having a detrimental impact on services, particularly Rotterdam as Europe’s busiest port.
Main Reasons for Bottlenecks
- As record cargo volumes that were exported from China and Southeast Asia during December arrive in European ports this is resulting in congestion.
- Rolling terminal strikes in France are causing delays.
- These issues can result in last minute port call cancellations which can impact feeder connections.
Impact on Freight Rates
- Spot rates from the Far East to Northern Europe continue to drop with spot rates falling to 4,000 USD per FEU with further reductions expected.
- Between Far East to North Europe carriers have blanked 30% of the capacity to protect significant rate drops.
Outlook
- Carriers are maintaining higher long term contract rates.
- We don’t expect a quick return to transit via the Red Sea as the carriers closely monitor the fragile ceasefire to see if this progresses to Phase 2.
Ocean freight trends - Asia Pacific
- As of February 2025, the global shipping industry continues to navigate through a complex landscape of geopolitical tensions, tariffs and regulatory changes, and operations challenges.
Main Reasons for Bottlenecks
- Approximately 10% of the global fleet capacity tied up due to port congestion in the first two weeks of February. This is largely due to alliance restructuring among major shipping lines and operational disruptions at key ports particularly in China.
- Container build-up over the past months due to the diversion of shipping routes from the Red Sea Crisis and rerouting via the COGH still persists. Longer transit times will be seen as a norm in 2025 as previously reported.
- It is expected that shipping lines are continuing to adapt to the evolving landscapes due to geopolitical and tariffs regulatory changes by exploring alternative routes, enhancing supply chain resilience to mitigate the impacts of these bottlenecks.
Impact on Freight Rates
- Re-routing of ships around the COGH has added around 14 days to vessel transit times, increasing operational costs due to extra bunker consumption and delays in vessels turnaround time and keeping freight rates elevated for Asia-Europe and Asia-Middle East routes.
- The removal of duty-free entry for low-value Chinese goods is expected to reduce demand for small package airfreight and containerized shipping to the US, potentially softening rates in this segment.
- Global port congestion will reduce capacity and raise spot rates. Post-Chinese New Year demand may cause short-term spikes for exports from China. Rates may fluctuations until demand stabilizes. Geopolitical tensions may keep rates high, but softening is expected by mid-2025 as disruptions ease and capacity balances.
Outlook
- The shipping industry in Asia is largely dependent on the tariff and regulatory adjustments as trade shifts could reshape rates dynamics.
- Air freight rates could be driven up higher due to the shift from ocean shipping. Airlines usually would be deploying additional and re-allocating flights to meet the expected demand increase in Asia (particularly China) and this should lead to reduced capacity and higher rates on other routes.
- Bertling and our clients are encouraged to closely monitor US trade policy and global events to navigate potential challenges effectively in the shipping industry.
Ocean freight trends - North America
- Trump Administration is proposing charges that could add millions of dollars in costs for ocean container lines and other carriers calling U.S. ports. The proposal by the office of the United States Trade Representative (USTR), published Friday 21 February, sets fees as high as 1.5 million USD per U.S. port call for ships built in China and 500,000 USD for a vessel operator with even a single Chinese-built ship in its fleet, or on order with a China shipyard. Public comments being accepted until March 24th.
- In February, President Trump announced plans to impose tariffs of 25% on all US steel and aluminum imports, effective 12 March. Trump cautioned there would be no country exemptions or product exclusions, and that more downstream products would be included.
Main Reasons for Bottlenecks
- New York/New Jersey Port Terminal Congestion - "As part of our ongoing efforts to address the empty equipment situation in NY/NJ, we will be deploying additional vessels over the next weeks to help ease congestion. Between Week 7-9, we expect approx. 17,000 TEUs of empty equipment to be evacuated from the terminals. Our teams are also exploring the option of off-site depots where empty containers may be returned” (Hapag Lloyd).
- As all the key trends mentioned could contribute to potential bottlenecks.
Impact on Freight Rates
- Freight rates from Shanghai to New York decreased 13% to $5,126/40ft container and those from Shanghai to Los Angeles decreased 11% to $3,888/40ft container. Los Angeles to Shanghai and New York to Rotterdam remained stable. (Drewry)
Outlook
- "Ceasefire in the Middle East does not suddenly mean there is now safe passage through the Red Sea for all container ships – but it is enough to cause a change in market sentiment and this has a real impact on freight rates.” (Xeneta)
Ocean freight trends - South America
- Port movement in Brazil reached a new record in 2024, with 1.32 billion tons, an increase of 1.18% compared to the previous year.
- Public ports saw a 5.13% increase, reaching a total of 474.4 million tons moved. The best-performing terminals included the ports of Santos, Itaguaí and Paranaguá, which showed increases of 2.05%, 8.78% and 1.65%, respectively.
- Over R$1 billion was invested in port infrastructure modernization and expansion in 2024, with R$1.7 billion expected for 2025.
Main Reasons for Bottlenecks
- Traffic restrictions during the carnival holidays in Brazil from 27 February 2025, to 5 March 2025, will affect special cargo (overweight and oversize) on highways accessing the Port of Santos.
- These restrictions may cause delays during the period and for at least 7 days after, impacting export special cargo and the release of imports for transit.
Impact on Freight Rates
- MSC informed that as from 6 March 2025, charges for Brazilian market will be adjusted, including BL Fee, Certificate fee, Manifest corrector, Seal fee, Administration fee, Late shipping instruction, Cancel export equipment fee. (The new applicable rates have not yet been announced).
- Hapag Lloyd announced PSS from Chile to Asia, which is applicable to all and only frozen reefer shipments starting on 1 February 2025, and will be valid until further notice. (Reefer Cargo 20' & 40’ units: 600 USD).
Outlook
- We expect a stable demand and stable rate levels, also in the coming weeks.
Ocean freight trends - Middle East
- Volumes have not yet picked up resulting in erosion of rates
Main Reasons for Bottlenecks
- Dammam is reporting a waiting period of 3 days. Port congestion continues in Dammam due to cargo for Jeddah (West Coast) being routed to Dammam Sea Port on the East Coast, as ships continue to circumnavigate via COGH to discharge containers in Dammam Sea Port for pan-KSA. A 3-day waiting period was reported as of the second week of February.
- Truck availability to pull out import full containers.
- Continued congestion at container yard/s outside Dammam Port for returning empty containers is resulting in lower productivity and longer turnaround times.
- Jebel Ali Port congestion has started to ease, now reporting a 1-day waiting period as of the second week of February.
- Ramadan started on 28 February which could cause delays and changed/reduced office hours announced by many companies during the holy month.
Impact on Freight Rates
- Rate erosion continues as exports have not yet increased.
Outlook
- Significant uncertainties continue.
- Cautiously optimistic outlook on exports, specially out of India and major carriers are tweaking their routes into USA East Coast to achieve a quicker transit.
- +460 days of The Red Sea crisis even though a ceasefire agreement has been agreed starting January 19th to be deployed in 3 Phases.
- Port and hinterland infrastructure are the bottlenecks and expected to continue.
- With the announced changes in “Alliances”, service disruptions are anticipated during the transition.
- Weather-related disruptions add to uncertainties.
Ocean freight trends - South Africa
- An average of - 11, 548 TEUs was handled per day, with - 12, 123 TEUs projected for next week.
- Rail cargo handled out of Durban was reported at 2, 757 containers, up ↑12% from last week.
- SARS December trade stats – exports: ↓11,2% (m/m); imports ↓1,1%; YTD trade surplus: R196,1 billion.
- Cross-border queue: ↑0,7 hrs; transit: ↑0,9 hrs; SA borders: 10,7 hrs (↑44%); SADC: 5,8 hrs (↑45%).
- Schedule reliability remains between 50%-55%; the average delay for late vessel arrivals is - 5,28 days.
Main Reasons for Bottlenecks
- The Port of Cape Town conceded around 50 operational hours this week due to strong winds, dense fog, and equipment breakdowns.
- The main operational constraints in Durban proved to be adverse weather and continuous equipment breakdowns.
- Operations at our Eastern Cape Ports were mainly impacted by adverse weather and marine equipment breakdowns.
- Minimal delays were reported at the Port of Richards Bay.
- The Maersk Vilnius 502N will cut and run from the Port of Cape Town to proceed to dry dock in Shanghai due to a strict deadline, impacted by adverse weather, equipment breakdowns, and poor productivity. All shortshipped units will be accommodated on the MSC Juliana III 503N. Additionally, the Kalahari Express sought shelter in Europe due to adverse weather and will be delayed in South Africa.
- A derailment occurred on the ConCor line. Two lines were seemingly affected, with one line already back in service and the second line to be recommissioned later.
- The median border crossing times at South African borders increased by over three hours, averaging - 10,7 hrs (↑44%, w/w) for the week.
- In contrast, the greater SADC region (excluding South African controlled) also increased – by around two hours, averaging - 5,8 hrs (↑44%, w/w).
- Operations along the Lebombo Border Post and N4 Corridor have essentially returned to normal, with truck volumes stabilising at 1 425 HGVs per day and border processing times averaging 2,5 hours per crossing.
- Rail flows to Maputo have increased to seven trains daily, with Eswatini sugar trains reaching two per day. However, a derailment at KM7 in Mozambique caused a three-day disruption before recovery.
Impact on Freight Rates
- Disruptions caused by the above mentioned factors will impact rate levels, schedules and space.
- We will keep monitoring the situation closely and keep our customers closely informed.
Outlook
- We expect the above mentioned disruptions continue in the coming days and weeks.
- We keep a close eye on the unrests in DR Congo and Mozambique, which are a great concern.
Customer advice
Considering the ever-changing market conditions and forces, please:
- Think ahead and book well in advance. Try to plan for 6 months ++.
- Consider that the market can change significantly. Further disruptions can happen anytime.
- Identify contract options that enable flexibility and resilience for your business.
However, it is our job at Bertling to keep global supply moving and do all we can and apply our knowledge, network and expertise to protect our clients’ while taking the latest market developments into account. We are there to find the best solutions to ensure cargo flows.
