Weekly Freight Update (December 17, 2024): Freight Quote Fluctuations & Maersk's Strategic Shifts

Stay updated on global freight quotes, with insights on major rate changes for routes from Asia to the U.S. and Europe, and strategic shifts in the maritime industry as Maersk adapts for 2025.

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Weekly Freight Update (December 17, 2024) Freightos Baltic Index - Freight Quote Overview

• Asia to U.S. West Coast (FBX01 Weekly): +10%, $4,301/FEU
• Asia to U.S. East Coast (FBX03 Weekly): +13%, $5,814/FEU
• Asia to Northern Europe (FBX11 Weekly): -5%, $5,051/FEU
• Asia to Mediterranean (FBX13 Weekly): -2%, $5,761/FEU

Detailed Analysis

Asia to Europe/Mediterranean Freight Quotes: Freight quotes have decreased slightly, but prices remain elevated compared to previous months due to pre-Chinese New Year demand.

• Increased by 12-18% since November
• Up 40% compared to October

Key Influences on Freight Quotes:

• Chinese New Year (29/01/2025): High demand for shipping before the holiday break is driving freight quotes up. Many companies are managing inventory more evenly throughout the year to mitigate supply chain disruptions.
• Weather Conditions: Severe weather continues to cause congestion in major East Asian ports, particularly in China and Japan.

Trans-Pacific Freight Quote Trends: Rates surged by over 10% last week due to preemptive shipments ahead of a potential strike by U.S. dockworkers (ILA) on 15/01/2025. However, the impact has diminished as the early shipping window closes.

Key Factors Affecting Freight Quotes:

• Labor Disputes: Reduced risk of strikes in U.S. ports, but ongoing negotiations could still affect transatlantic and Europe-bound shipments.
• Reefer Container Shortage: There continues to be a shortage of refrigerated containers, driven by higher demand in the food and specialized cargo sectors.

Maersk's 2025 Freight Strategy

Network Overhaul: Maersk will end its decade-long partnership with MSC and launch the Gemini Alliance with Hapag-Lloyd in February 2025. The new network will optimize shipping reliability to 90% from the current industry average of 53%.

Port Adjustments:

• Felixstowe to London Gateway: Maersk will shift operations from Felixstowe to London Gateway as the main hub for Asia-Europe freight routes to enhance efficiency.
• Bremerhaven Stable, Other Ports Strained: While Bremerhaven remains steady, major European ports like Rotterdam, Antwerp, and Hamburg are facing congestion, slowing down clearance times.

Challenges from China: Starting 1st December 2024, China has implemented stricter export controls on dual-use goods, impacting global supply chains, especially in high-tech industries like semiconductors and AI.

Weather Impact on Freight Quotes: Ports in the Adriatic and other major European ports are expected to face more challenging weather conditions, disrupting transport in early 2025.

Global Container Freight Outlook for 2025 by Fitch

Stable Outlook for Freight Quotes: Fitch has revised its global container shipping outlook from "downward" to "stable," driven by improvements in bulk and oil shipping, although container shipping still faces challenges from oversupply and emissions regulations.

Risks from Geopolitics: Ongoing geopolitical tensions, including conflicts in the Red Sea and the broader political instability, continue to disrupt global supply chains. However, increased demand for oil shipping, due to events like the Ukraine war, provides some stability.

Oversupply & Price Reductions in Freight Quotes: The global container shipping industry may face oversupply in 2025 with many new vessels entering service. This could lead to further price reductions in freight quotes, especially on long-term routes like Asia-Europe and Asia-U.S.

Tightening Emission Regulations: The EU's stricter emission standards will raise operational costs, forcing shipping companies to upgrade fleets and invest in new infrastructure. Dual-fuel vessels are becoming the new industry standard.

"Just-in-Case" Supply Chain Strategies: With extended geopolitical risks, companies are adopting "just-in-case" strategies to manage disruptions, creating short-term demand spikes for freight quotes.

FAQs on Freight Quotes

1. What are current freight quotes?
2. What drives freight quote fluctuations?
3. How is the shortage of refrigerated containers affecting freight quotes?
4. How do geopolitical risks influence freight quotes?

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