Swift Cargo 2024 End of Year Market Update

31/Dec

The shipping industry faces significant uncertainties as 2024 ends, with ongoing geopolitical, labour, and policy challenges. 

• The Houthi’s attack on vessels in the Southern Red Sea continues, causing most of the ocean carriers to reroute the vessels around the Cape of Good Hope, increasing transit times and costs.
• Following the US Presidential elections in November 2024, the Trump Presidency Phase 2 is set to recommence on January 20th, bringing the threat of increased tariffs on imports from around the world. 
• The biggest concern right now is an impending International Longshoreman’s Association (ILA) strike along the US East Coast & Gulf Coast. It is very likely to start at the midnight on January 15th, 2025. The terminal automation is a key issue that ILA and United States Maritime Alliance Ltd. (USMX) need to work out. While President Trump is firmly on ILA’s side, the ocean carriers don’t seem to be giving into ILA’s demand of no-automation at the port terminals. 
• The strike could severely disrupt shipping, causing delays, congestion, and higher costs. Using Canadian ports might not be feasible as they face their own capacity and labour issues. Space is tight via Montreal, Quebec, St. John New Brunswick, Halifax and Nova Scotia as well.
• Ocean carriers have started developing contingency plans and are proposing surcharges which might come into effect, if the strike happens. (e.g., $1700 per 40' container surcharge which is announced as ‘Work Disruption Surcharge’ for FCL, and up to $50.00 w/m for LCL).

OCEAN CARRIER ALLIANCE CHANGES IN 2025

• Maersk Line is set to end its “2M Alliance” with Mediterranean Shipping Company (MSC) on February 1st, 2025.
• MSC will operate as a standalone carrier with no primary carrier partner. 
• Hapag Lloyd will withdraw from their partnership “THE Alliance” with Yang Ming Lines, Ocean Network Express and Hyundai Merchant Marine.
• Maersk and Hapag Lloyd will begin a new collaboration with Hapag Lloyd - “Gemini Cooperation” on February 1st, 2025.
• Yang Ming Lines (YML), Ocean Network Express (ONE) and Hyundai Merchant Marine (HMM) will now brand themselves as “The Premier Alliance”. 
• Evergreen Lines, CMA CGM, Cosco Shipping and OOCL Lines is now called “The Ocean Alliance”. Their agreement is in place through 2032. 
• Zim Lines is operating independently in many trade lanes.  Zim also has an agreement with MSC in the Transpacific.

REGIONAL UPDATES: 
•    INDIAN SUBCONTINENT (ISC) TO THE USA:

1. Exports from the ISC to the United States are expected to see steady growth.
2. Solar equipment is a strong addition to the list of regular commodities (Pharma, engineering goods, foodstuffs etc.) exported to the USA from the ISC.
3. The Federation of Indian Export Organizations (FIEO), the apex body for exporters, is crafting a strategy to boost exports to the United States in five key sectors: electronics, toys, apparel, organic & inorganic chemicals and leather. 
4. Carriers are looking at implementing rate increases from Jan 15.

•    ASIA TO THE USA:

1. Imports from Asia is surging again after a brief cooling off period in November and early December. Vessel space is very tight from all origins in Asia to the West Coast and East Coast. The increased volume via the West Coast has led to rail delays going into the Midwest.  
2. Rates are expected to rise until Chinese New Year, then stabilize.
3. Potential tariff increases under the Trump Administration could impact U.S. import volumes.
4. Carriers may use blank sailings to manage demand artificially.

•    EUROPE TO THE USA:

1. Space is tight from Europe to the USA due to the potential ILA strike and possible tariffs on European imports. 
2. Import rates have also been rising but not as sharply as those from the Far East.
3. The upcoming shifts in the ocean carrier alliances may disrupt vessel schedules in late January and February 2025. 
4. The Hapag Lloyd-Maersk “Gemini Agreement” will call at The Port of Baltimore when they begin their partnership from North Europe, Italy (Via Tanger Morocco) and several ports in China. This will benefit importers/exporters, especially for out-of-gauge (OOG) cargo due to strong equipment availability. 
5. Yang Ming Lines has announced that their AL2 service will start calling at the Port of Baltimore in February with stops at key European ports like Southampton, Rotterdam, Antwerp, Bremerhaven and Le Havre. 
6. The Roll-on/Roll-off carriers from North Europe are back to handling heavy, wide, and tall cargo again. The Port of Baltimore remains the top hub for RO/RO cargo, serving Midwest destinations for imports and European exports.

•    LATIN AMERICA TO/FROM THE USA:

1. South American Rates are strong, especially Brazil to the USA. Space is tight due to a lack of capacity. 
2. Port congestion in Brazil is causing vessel delays going northbound. Southbound rates are stable, and carriers are looking for cargo. 

•    EXPORT FROM THE USA

1. The United States Ocean export volumes are strong now but that may decline if trade wars erupt, and retaliatory tariffs are levied in 2025. Carriers are actively looking for freight to fill their ships.   
2. Empty container availability at inland depots is dependent on imports; higher tariffs could cause equipment shortages. 
3. Vessel schedule disruptions are likely to persist, worsened by a potential ILA strike. 
4. Special equipment (e.g., open top, flat rack containers) remains scarce at key ports like Baltimore; early bookings are advised.

•    TRUCKING ISSUES IN THE USA

1. Container drayage at most ports and railroads remain fluid with no significant issues with capacity. However, a January strike could quickly tighten truck capacity and increase demurrage costs. Congested ports may lead to an increase in demurrage costs. 
2. Flatbed trucking and heavy haul capacity seem to be stable, being supported by energy and infrastructure projects.

With these considerations in mind, we recommend that you plan ahead. Swift Cargo is always at your service, constantly monitoring the marketing conditions and providing optimum solutions tailored to your needs.