Amidst the continued geopolitical risks and Trump’s presidency starting, what are the global container market trends we will see in 2025?
We will see a continued alleviation of the capacity pressure caused by the deviations around Africa due to the Red Sea crisis.
This means that, all else equal, the peak season of 2025 will not be as capacity challenged as we saw in 2024. But the Red Sea crisis is also a key element of market dynamics in 2025.
As long as the crisis persists, it will continue to soak up a very large amount of capacity. Should the crisis be resolved and carriers revert back to a Suez routing, this will initially cause significant congestion problems in Europe due to the sudden contraction of the supply chain. This will in itself continue to soak up some capacity. But over time we will revert back to the core state of the industry, which is presently one of overcapacity. This in turn will cause an uptick in scrapping where we have seen almost no scrapping since 2020.
If the alliance is successful, what impact will Maersk-Hapag Gemini Cooperation have on shipping alliances and network designs? What are the evolving strategies of major carriers?
We are seeing two very different approaches to network design. Gemini is focused on few but large hubs and promising high reliability. At the other extreme, MSC is focused on providing as many direct port-port combinations as possible. Which concept will work best operationally remains to be seen, but an equally open question is which network design is commercially more appealing to the customers.
Premier Alliance and Ocean Alliance have networks in between these two outer positions. 2025 will be a test to see which one works better.
Shippers hate transshipment and paying a premium. Do you think large and fewer hubs are beneficial to the shippers?
They could be. If Gemini is able to execute their operational strategy as they plan, they could indeed have a network with fewer delays and disruptions.
Port congestion is still making headlines with Asian ports and key transshipment hubs, reaching critical levels and adding pressure to main trade lanes.? How long would this continue?
This is to some degree still a ripple effect of the Red Sea, and hence part of this pressure could continue for a while to come.
Some analysts are predicting a major collapse in freight rates. What is your view?
I see a freight market that is very volatile as long as the Red Sea crisis persists, both for upwards and downwards movements of freight rates.
With severe overcapacity, will we see operational measures such as blank sailings, sliding schedule weeks or cancelling services altogether?
But severe overcapacity will only occur once the Red Sea crisis is resolved and the subsequent congestion in Europe is worked out. Then keep in mind that we potentially have some 6-8 percent of the capacity ripe for scrapping.
