Analysis of the ocean freight market by Metro Shipping

The ocean freight industry is currently facing various challenges and changes that are impacting global shipping dynamics. From fluctuating rates to the growth in container shipping capacity, as well as the effects of new trade policies implemented by the US, the ocean freight market is experiencing a shift in operational and regulatory landscapes.

The Shanghai Containerised Freight Index (SCFI) has seen a decline since the beginning of the year, mainly due to the resolution of the US East Coast port strike. However, freight rates are still volatile due to factors such as service disruptions, alliance reshuffling, and geopolitical tensions in the Red Sea. Moreover, approximately 30% of Far East westbound sailings are expected to be blanked, indicating pressure on market capacity.

In terms of capacity, liner capacity growth has slowed down after a record increase in 2024 and is now projected to be around 5% for 2025. Port congestion has reached a three-month high of 10.3%, especially in Chinese ports before the Lunar New Year. With only 0.2% of vessels (30 ships) idle, the liner sector remains fully utilised. Carriers are also shifting towards using 16,000 TEU vessels as the new standard, moving away from ultra-large container ships (ULCS).

The upcoming months from February to April 2025 are expected to be volatile in the ocean freight market due to factors like the post-Lunar New Year slowdown and carrier alliance reshuffles. In February, capacity shortages are anticipated on Asia–North America and Asia–Europe lanes, potentially leading to increased freight rates. By March, the market balance might improve as new alliance networks stabilise, while capacity constraints could persist from Asia. Finally, conditions should stabilise by April.

Freight rates are decreasing across all trades, with SCFI falling by 17% since the start of 2025. Service disruptions and alliance changes have contributed to this decline, despite strong demand leading up to Chinese New Year. Global schedule reliability has been between 50%-55%, but port congestion has seen a three-month high, with 10.5% of the global fleet (3.3 million TEU) stuck in congestion.

Looking ahead, the Far East is expected to remain a vital driver of global container trade, contributing significantly to the projected 3.3% Compound Annual Growth Rate (CAGR) from 2026 to 2028. The region’s demand is forecasted to grow by 2.9% due to robust intra-Asia trade and strong export performance, particularly to North America and Europe. Despite trade challenges, the economic resilience of the Far East, led by China and India, is likely to support continued growth in freight volumes.

In conclusion, the ocean freight market is facing challenges of rate volatility, capacity constraints, and changing trade policies. While global liner capacity is expected to grow by 5% in 2025, factors like port congestion and alliance reshuffles are causing market instability. However, despite these challenges, demand from the Far East remains a crucial growth driver, emphasizing the need for resilient supply chains and budgetary certainty to mitigate risks and maintain stability.