Asia-Europe

Containerized imports into the US last month set an all-time high, according to PIERS data, reflecting what is likely a peak in 2025 imports as shippers tried to get ahead of tariffs.

Exporters’ proclivity for rate shopping leads to choppiness in a market that is also beholden to vessels being pulled into larger ocean freight markets.

Forwarders said space for bookings, especially to the more-demanding West Mediterranean market, has become acutely tight due to multiple blank calls in recent weeks.

The number of unique services on routes navigating through Houthi-controlled waters has doubled since the third quarter of last year, according to data from eeSea, as carriers who do not call Israel feel growing comfort sailing the Bab-el-Mandeb Strait.

Having tentatively returned to Red Sea transits, multipurpose and heavy-lift vessels are again shunning the route in favor of the safer but longer passage around southern Africa.

Double-digit demand is expected to continue through the third quarter on the Asia-Europe trades, piling more pressure on terminals that have been overstretched for months.

Local freight forwarders have reported rate increases in the range of $300 to $500 per FEU month over month and expect further slight gains if the pace of demand remains steady.

The joint venture is accompanied by a long-term agreement that will lock in the supply of LNG to the ocean carrier’s fast-growing dual-fuel fleet that will increase to 123 vessels by 2029.

With more ships expected to divert to the longer Cape of Good Hope route around southern Africa, shippers could find it more difficult to secure capacity for project cargoes.

But the longer voyages are also seeing container shipping companies cutting the average fuel intensity per TEU mile and ensuring vessels are sailing full.

The decline came despite a 4.4% increase in total container volumes to 2 million TEUs, the carrier said in a quarterly update Friday.

The Marseille-based liner has finalized operational plans to call off its remaining vessel-sharing agreements with the carriers after Gemini Cooperation-linked realignments.

Mediterranean Shipping Co. is furthering its lead in vessel tonnage so far this year as it absorbs more than double the amount of new capacity added by No. 2 carrier Maersk.

Beginning in September, the joint service will make added stops at Aarhus in Denmark, Gothenburg in Sweden and Rotterdam in the Netherlands as the last three European calls.

Instead of its 24,000-TEU ships making direct calls at West African ports, Hapag-Lloyd’s main Mediterranean hub is being used as a key transshipment point for Asia-Africa services.

Longer transits around southern Africa, restructured alliance networks and bottlenecks in Asia continue to cause ships to arrive outside their scheduled European arrival windows.

Peak shipping season began early on both trade lanes, but the advancing of US orders from China will hit trans-Pacific demand in the second half of the year.

Internal and external forces in the first half of 2025 mitigated container vessel overcapacity, but steep challenges lie ahead, writes Journal of Commerce Executive Editor Mark Szakonyi.

Iran has yet to make good on its threat to close the Strait of Hormuz, but nervous carriers are preparing contingency plans as the region moves onto a war footing.

Strong demand for much of the year has kept North European ports under pressure, slowing attempts to ease the bottlenecks.

Forwarders moving cargo on monthly contracts have pegged average week-to-week gains at $200 to $300 per FEU for bookings from West India to Felixstowe/London Gateway or Rotterdam.

But all eyes are on the July 9 end to the 90-day pause on US tariffs that forwarders believe will determine the level of demand through the rest of the year.

Adding to recent capacity cutbacks, the carrier has redeployed vessels serving its premier Himalaya Express service between India, Europe and the Mediterranean onto Asian trades.

Labor shortages and low water levels in Europe are intensifying persistent port bottlenecks, while the trans-Pacific demand is pulling vessels out of Asia-Europe.

The Marseille-based carrier has finalized operational plans to shift vessels deployed on its MEDEX service back to the normal sailing journey through the Suez Canal beginning next month, sources say.

The carriers want to raise prices by more than 50% in a bid to stem the slide in rates that began at the end of December and is showing no signs of slowing.

With less than half of CMA CGM’s fleet built in China, CFO Ramon Fernandez believes US services can be structured to avoid the incoming tonnage fees.

On top of the persistent pressure of overcapacity and muted demand, industry sources have also linked the market softening to the historical seasonal pattern of the Indian export trade.

The carrier was commenting after reporting its first-quarter results along with Taiwan’s other two mainline carriers, Evergreen Marine and Wan Hai Lines.

Despite a ceasefire announced over the weekend between India and Pakistan, the combined impact of the recent tensions and enhanced port security protocols has left container supply chains out of India’s west coast corridor in a state of flux.

There remains no guarantee of safety for ships, crew and cargo passing through the waterway, which means it would likely be out of bounds for the rest of the year, says CEO Vincent Clerc.

Sources anticipate the additional rerouting costs in the region will force other ocean carriers to follow suit on similar surcharges.

The freeing up of vessel capacity that has been diverted around southern Africa for the past 18 months could inject as much as 2 million TEUs of functional capacity into the global container shipping market.

The restrictions have “effectively” made direct vessel calls to either Karachi or Port Qasim on India services operationally impossible, according to major container lines.

While ongoing port congestion in North Europe and longer voyages around the Cape of Good Hope will help to absorb incoming vessels, it will also leave the trade lane open to volatile shifts in capacity that cannot be planned for, a Journal of Commerce webinar was told.

A range of factors including full yards, labor unrest and carrier network changes are making it difficult for the hubs to clear container bottlenecks.

The carrier and competitor Hapag-Lloyd announced strong financial results Wednesday, but both said the success of early 2025 won’t be replicated through the balance of the year given market headwinds linked to the global trade conflict.

But executives at both northern range hubs highlighted the extreme volatility of the first three months and the US tariff-driven uncertainty that lies ahead.

With the door to US trade effectively slammed shut by tariffs, Chinese manufacturers are urgently looking for alternative markets in which to offload their surplus inventory.

First-quarter carrier earnings are likely to be buoyed by high rates and strong demand that has spilled over from 2024, but tariffs, slowing volume and excess capacity are darkening the outlook for the rest of the year.