International Maritime

months on Asia-North Europe routes were up 52 % year over year at $ 2,804 per FEU , while Asia-Mediterranean routes were flat at $ 2,436 per FEU , according to Xeneta data .

However , Sand said shippers should not be “ overly disappointed ,” considering contract rates on both trade lanes have fallen sharply since September .

‘ Stronger leverage ’

Chantal McRoberts , director and head of advisory for the Drewry Supply Chain team , said China-North Europe contracts agreed to in December contained rates that are $ 1,400 to $ 1,600 per FEU higher than in the same period in 2023 .

“ This jump in costs may have changed with the contracts just starting , but there has clearly been a 30 % -plus inflation in recent contract negotiations on this trade route ,” she told the Journal of Commerce , adding that Drewry was also hearing of some “ strong ” offers on quarterly rates in the Asia-Europe market .

Jefferies Equity Research also highlighted cargo owners ’ moves to lock in long-term rates .

“ Liners have much stronger negotiating leverage , as evidenced by recent 2025 Asia-Europe contracts concluding at $ 2,500 –$ 3,000 per FEU as compared to 2024 contracts which were concluded at best at $ 2,000 ,” Jefferies said in a container market update Jan . 8 .

“ Freight rates have ebbed and flowed at elevated levels since Red Sea diversions began and more recently have benefited from the normal pre-Lunar New Year ordering , which has been compounded by uncertainty related to looming US tariffs and potential US East Coast port disruptions ,” the bank added .

Jefferies is expecting the higher contract levels to have a positive impact on carrier financial results in the first quarter .

“ We are raising our [ first-quarter ] estimates to reflect a strong start to 2025 ,” the bank noted . “ We expect earnings to be frontloaded this year due to the normal pullback following Lunar New Year and potential destocking later in 2025 .”

COMMENTARY

By Jeremy Masters

When it became clear that the restructuring of the major container carrier alliances in the east-west trades meant moving from three major networks — 2M , Ocean and THE — to four — Ocean , Gemini , Premier and a standalone Mediterranean Shipping Co . ( MSC ) — radical overcapacity was in the cards .

Even though the carriers knew they were moving into dangerous territory , they didn ’ t have many options to curtail capacity if they wanted to build robust networks benefiting from the economies of scale that come with larger ships . In that sense , the most viable option to limit the overall capacity injection at the front end was for the carriers to orchestrate some overlap of the reconfigured networks .

Maersk and Hapag-Lloyd made it clear at the outset that Gemini Cooperation could not entertain more members or slot agreements if it was to deliver the quality level to which it aspires . This left it to MSC , Ocean and Premier to take some initiatives , and MSC has led the charge .

Gabriel S Fernandes / Shutterstock . com email : greg . knowler @ spglobal . com

Asia – Europe spot rates elevated ahead of annual contract talks

Average container spot rates from Asia to North Europe , pricing in long-term contrac and in long-term contracts signed in the last three months

$ 8,000 $ 7,433

USD per FEU

$ 6,000 $ 10,000 $ 4,000

$ 2,000

$ 0 L Jul Jan 2024 Jul Jan , 2025 Jan

202

Short-term rates Contract rates signed in last three months Contract rates

Source : Xeneta

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26 Journal of Commerce | February 3 , 2025 www . joc . com