Carriers push for higher rates during contract season
Recent developments in ocean freight delivery
Freight volumes are currently down on the Asia-U.S. and Asia-Europe routes. That’s due to sluggish volumes post-Lunar New Year, shippers pausing because of tariff uncertainties and buyers working through inventories from recent months of front loading. March is also historically a slower month for freight volumes.
For April, anticipate carriers reducing capacity to justify holding or raising rates, particularly on the Trans-Pacific Eastbound (TPEB) route. The sustainability of rate increases remains uncertain, as buyers signal a resumption of orders from Asia.
With contract season under way, carriers are pushing for higher year-long rates. This approach is driven by increased delivering costs and 2024’s labour negotiations on the U.S. East and Gulf Coasts, as well as in Canada. Ship diversions away from the Suez Canal continue to increase transit times, adding mileage and costs to deliveries.
Best practices for ocean delivery
- Diversify suppliers: Seek advantages through different locations or preferential trade partners.
- Establish lead time requirements: Define expectations and choose modes and services that fit timeframes.
- Consider LCL and alternative routings: If supply lines allow, less-than-container load (LCL) or additional transshipments can lead to savings—even in a volatile market.
- Work with trusted providers: Ensure providers can fulfil transit time assurances and arrange critical capacity when needed.
- Conduct forecasting: Accurate forecasting is crucial for preserving your margins.
Potential new U.S. port charges on Chinese delivery companies
The U.S. Trade Representative (USTR) is considering imposing significant port fees on Chinese delivery companies and Chinese-built ships, potentially adding up to $1.5 million per port call. The USTR accepted public comments through 24 March 2025 and held a public hearing on the proposal.
If approved and enacted, the fees would affect U.S. imports, global trade and various stakeholders in the delivery industry. Smaller niche carriers that have entire fleets built in China likely would not be able to pass along the full costs of the fees and would need to dramatically alter their existing service offerings.
Schedule reliability continues to slip
Global schedule reliability has dropped from 53.7% in November to 51.5% in January 2025, another 2% drop from the previous month. Port congestion is escalating due to vessel diversions from the Suez Canal situation, adverse weather in Asia and Latin America and the carrier alliances being reshuffled. Additionally, the wave of front loading has subsided. Container equipment imbalances, springing from the abundance of empty import containers and dampened export container demand, are likely to contribute to service string adjustments and broader delays as reflected in the flagging schedule reliability numbers.
Asia
Asia-Europe
Carriers are attempting to enforce another rate increase in April for Asia-Europe trade, but market stability means it is likely unsustainable. Ocean Alliance launched its new NEU3 service from Shanghai on 4 April, 2025, while MSC has reassigned mega vessels from Asia-North Europe to Asia-Mediterranean and West Africa, stabilising North Europe capacity and increasing Mediterranean capacity.
Asia-U.S. and Latin America
Demand on Asia outbound core trade lanes is soft, with spot rates trending down. Trans-Pacific spot rates continue to slide amid ongoing contract negotiations, with a planned rate increase in April. Three new services will launch in the Asia-LATAM trade in April, including one by seven small regional Asia carriers. Expect more blank sailings across major East-West trade lanes to kerb spot rate deterioration.
Europe
Strikes across Europe have strained operations at main hubs such as Rotterdam, Le Havre, Bremerhaven and Felixstowe. The impact includes increased wait times and delayed vessel discharge.
North America
U.S.-Asia
U.S. West Coast (USWC) ports are still clearing a backlogue of congestion due to recent front loading, affecting U.S. exports, but this will continue to ease as volumes slow down. The TPEB trade saw a surge of imports in Q1 2025, leading to a 20-30% increase at USWC ports compared to 2024.
Congestion in Asia and at USWC ports is causing schedule unreliability, exacerbated by carrier alliance reshuffling. Transshipment ports in Asia face delays of 10-14 days due to adverse weather and increased services.
ONE and Cosco are routeing rail cargo through USWC ports to balance rail activity. MSC has suspended its Mustang service, with changes to the Chinook and Orient services to support connectivity in their Asia-NAM west coast services.
U.S.-Europe
Vessel space at U.S. East Coast (USEC) and U.S. Gulf Coast (USGC) ports is tighter due to carrier alliance reshuffling in Q1 and Q2 2025. The Ocean and Premier alliances will have five scheduled blank sailing weeks from USWC to Europe, creating a cargo backlogue.
Rail diversions via USGC and USEC ports will increase space shortages. Europe faces significant port congestion at Rotterdam, Antwerp, Le Havre and Hamburg due to high import volumes, adverse weather, vessel shifts and port strikes.
The Ocean/Premier Alliance has announced a suspension of the Rotterdam calls for eight weeks. West Mediterranean ports like Valencia, Algeciras and Tanger Med are congested due to volume diversions. MSC Canada will replace Naples with Salerno on their Med-Canadian service. The Premier/Ocean Alliance will drop Saint John and Halifax calls on their AL5 service and Hapag resumed Saint John calls under the Gemini Cooperation in March 2025.
U.S.-LATAM
Schedule reliability to East Coast South America (ECSA) ports has been adversely affected by delays at southern Brazil ports, leading to blank sailings and port omissions. Carriers are diverting vessels from Navegantes and Rio Grande to Itapoa and Paranagua, spreading the congestion.
Space from USGC to ECSA and WCSA ports is tighter due to delays at transshipment and southern Brazil ports. Increased transshipment cargo is causing congestion at Panama, Caucedo, Cristobal, Cartagena and Kingston ports.
CMA and Cosco have shifted their BRAZEX service from Navegantes to Imbituba. MSC/Hapag and Maersk extended the suspension of their SEAC String 1/UCLA service at Mobile, Navegantes and Salvador. Maersk and Hapag will omit Norfolk on their Tango service, adding biweekly calls at Rio Grande/Rio de Janeiro.
CMA stopped calling Norfolk on their Americas XL service, launching new California Bridge services. Hapag's last AL5 service to LATAM departed Los Angeles on 2 March, 2025, with CCE service continuing. Hapag's CES service will add Philadelphia and Port Everglades, dropping Norfolk and Kingston. Seaboard Marine announced the suspension of service from Savannah due to congestion.
U.S.-South Asia, Middle East, Africa (SAMA)
Monthly rate increases to the Middle East are stemming from service instability and tighter vessel space. USEC and USGC ports to India and Mediterranean trade lanes are affected by diversions via the Cape of Good Hope, causing longer transit times and blank sailings.
Services to Red Sea and Persian Gulf ports are suspended or routed through congested transshipment hubs. USEC/USGC to India faces space shortages due to blank sailings and strong export demand.
Limited services from USWC to SAMA are affected by Asia port congestion. CMA, MSC and Cosco offer Middle East services from USWC ports. Turkon started USEC to India service via Türkiye in March 2025. Ramadan from 28 March to 2 April 2025, reduced working hours and staff in celebrating countries.
U.S.-Oceania
Space is opening with direct carriers and rates are softening. Regular USEC and AU port omissions during Q4 2024 and Q1 2025 are causing tight space despite lower demand, due to delays at U.S. ports and adverse weather at AU ports. Delays on transshipment services via Asia into Oceania are expected due to congestion at Asia transshipment ports.
Brown Marmorated Stink Bug season remains in effect until May 2025, requiring fumigation for applicable commodities. Union members at Patrick and Hutchinson terminals in AU will be renegotiating their contracts later this year, with possible strike action anticipated.
Canada
The constantly evolving policy regarding tariffs has stoked high market uncertainty, with rail and road haulers taking advantage of elevated spot rates while reducing staff due to less-frequent cross-border business. The uncertainty has led to recent delivery surges, cancellations and delays.
Carbon taxes have yet to significantly impact freight rates but are seen as a step toward cost savings for carriers, though it is unclear when the benefits may get passed along to shippers.
Rail congestion has increased demand and rates for long-haul intra-Canada moves, with weather delays affecting Canadian port dwell times.
South America
LATAM
The recent subdued demand on key lanes aligns with broader global trends. Ecommerce continues to drive rates upward in northern South America and Caribbean lanes. Mexican exports have opened additional capacity to Europe and South America.
Brazil
Southeast and southern ports are delivering at over 80% utilisation. However, empty return depots continue to face high demand and delays. Persistent ocean schedule instability remains poor due to port congestion. Caribbean HUB ports are congested and carriers are alternating calls in an attempt to maintain schedules.
West Coast South America
The market has ample delivery space from Colombia to the United States, Brazil, Peru and Europe. Congestion at Callao has decreased, improving exports from Peru. Chile's southern ports have high demand and low service offerings, but central ports offer export opportunities to Asia and Brazil.
Oceania
North America
Importers and exporters are increasingly shifting air cargo to ocean cargo as capacity increases and scheduling stabilises. Equipment to Oceania is available and fully serviced. Long-haul destination service offerings with full westbound transit are available. At present, terminal operation disruptions are minimal.