Container Shipping Quarterly

Special Report

Ocean carriers intensify cost-cutting efforts as rates slide on major trades

By Greg Knowler

on to carriers, and a lack of terminal investment that has made port congestion an ongoing challenge requiring more ships per string.

“ To give you an example, our main Asia to the US East Coast service used to operate on a weekly basis with 10 ships pre-COVID, but now we need 12 in order to maintain the weekly schedule,” he said.

“ All these elements of additional cost have found their way into our cost structure, and that contributes to increasing the overall cost that we carry,” Destriau added.

While carriers believe higher rates at the end of the

Container lines, facing rate pressure on all major trades, are doubling down on cutting costs that have materially increased from pre-pandemic levels.

Executives from Hapag-Lloyd, Maersk and Zim Integrated Shipping Services told investors during secondquarter earnings calls they are facing higher prices on everything from shipbuilding to port labor. That has prompted cost-cutting measures, including improving fuel efficiency, better scheduling, cutting port time, returning chartered ships at the end of contracts and slow steaming.

“ Pre-COVID, we were bunkering the ships on [ heavy fuel oil ], and since then we have transitioned to [ very low-sulfur fuel oil ]. This is a cost increase,” Zim CFO Xavier Destriau told analysts.“ If we look at the newbuilding price, that went up. The chartering rate went up. So, the cost of securing tonnage has also gone up compared to the prior period.”

Destriau also pointed to increases in cargo handling charges, higher wages for dockworkers that are passed

Container ship deliveries dwarf dwindling demolitions

Global container ship fleet deliveries and retirements by ship size, with forecast

TEU capacity

4,000,000

3,000,000

-1,000,000 2,000,000

1,000,000

0

Vessel: < 5,000 TEU Vessel: 5,001-10,000 TEU Panamax: 10-14,000 TEU Ultra Large > 14,501 TEU

Retirements

Notes: Shaded area indicates forecasts. Forecasts not available for retirements

Source: Sea-web, S & P Global © 2025 S & P Global

L

16 Journal of Commerce | October 6, 2025 www. joc. com