Bypassing transshipment

By Jeremy Masters

At some point, major container carriers will consider whether there is sufficient promise to deploy direct services in non-core trades, as opposed to the wide range of transshipment services currently on offer.

Carriers will want to have first-mover advantage. Transshipment— particularly between two deep-sea services— can produce very variable products. Carriers offering a direct service will have the chance to establish pole position.

Secondly, those with suitable tonnage will see an opportunity. Some of the carriers’ raids of small- to mid-range tonnage in the secondhand markets( plus ongoing delivery of newbuilds) will have greater flexibility in feeder, regional and developing trades to upgrade from transshipment without swamping a trade with big ships.

Finally, with all the capacity injections, both current and future, a glut beckons that will bring rates down on a widespread basis. Since ships are moveable assets, they can quickly spread overcapacity contagion from one trade to another. New direct services will certainly not be enough to swing the dial back; carriers will need to be nimble on multiple capacityeating fronts for that. But investing in new linkages and moving overcapacity out has some attractions.

‘ High-potential’ trades

Using Container Trade Statistics’( CTS) extensive volume data at a granular level, we looked at several developing trades and arrived at the conclusion that there are many with high potential.

In any new or expanded deployment, carriers will look at: a) the evolution of volumes in the trade and the expected utilization if they deploy a premium product; b) the evolution of rates in the trade, which in most cases will be reasonably healthy as a transshipment trade but might be impacted by an injection of new direct capacity; and c) the cost of ship, port and equipment systems, including imbalances.

New direct connections are the obvious starting point, but carriers also have the possibility to link in feeder hubs and partially piggyback on other direct routes. This has the advantage of access to a wider pool of cargo and derisking developing trades that can be volatile.

The announcement from Mediterranean Shipping Co. that it will serve the US – West Africa trade as part of its South Africa service certainly adds one substantive trade to its direct network. But by offering the US Gulf, Mexico and parts of Central America to West Africa and South Africa off Freeport and connecting West Africa to South Africa, MSC opens up other important flows of developing business and the possibility for double-dipping.

The East Coast of South America( ECSA) to West Africa is also emerging strongly. To serve this trade, carriers transship over the Mediterranean or North Europe with heavy diversion time. The least diverted is with MSC via Las Palmas in the Canary Islands, but that is still a combined 5,515 nautical miles ex-Rio to Abidjan in West Africa against 2,932 nautical miles direct.

There are few obvious links to other trades, however, so carriers would need to be comfortable about getting critical mass just in these lanes.

A good example of an emerging trade that combines several themes is India to ECSA. There is an HMM product from Kattupalli East India to Brazil, and the big carriers have a variety of transshipment products from Northwest India via South Africa, Sri Lanka, Morocco and Singapore. According to CTS, carriers moved a total of 150,667 TEUs between India and ECSA in the first 2025, compared with 312,619 TEUs for the full year in 2025, 229,493 TEUs in 2024 and 193,639 TEUs in 2023.

In addition to the positive progression in direct volumes, any carrier serving this trade naturally must go around the Cape of Good Hope, so a call at South African ports, although in competition with other direct services, offers a chance to significantly increase cargo catchment.

There would, of course, be more competition in these directly linked trades, but the 2024 annual volumes illustrate the opportunity. Last year, carriers moved 274,894 TEUs between India and Southern Africa and 98,145 TEUs between ECSA and Southern Africa, per CTS.

Adding an Indian Ocean transshipment hub such as Port Louis in Mauritius would offer more possibilities to mix-and-match markets and build a well-utilized, remunerative product.

There are plenty of possibilities out there, and carriers can do their homework on how trade volumes are developing. With a global capacity surplus in the offing— or perhaps already biting into rates— now is a great time to invest and move capacity off surplus trades.

email: jeremy @ shippingmastershk. com

New direct connections are the obvious starting point, but carriers also have the possibility to link in feeder hubs.

October 6, 2025 | Page 23

Bypassing transshipment