Plan for port congestion and upcoming holidays
Potential East and Gulf Coast port strike on January 15, 2025
More details about the potential East and Gulf Coast port strike on January 15, 2025, are available in the Intermodal and North American Ports section.
Environmental regulations
As environmental regulations become more stringent, certain regions, like East Asia and especially China, are particularly impacted due to domestic shipping activities that contribute significantly to air pollution. As the European Union also enforces stringent regulations that affect shipping routes in the North Sea and Baltic Sea, carriers continue to invest in scrubber technology and alternative fuels like liquid natural gas (LNG) to remain in compliance with regulations and manage costs effectively.
Port congestion
Port congestion is a major issue in Shanghai, China, and Los Angeles, United States. According to data at time of publication, there are 450+ vessels in port and two days of delay in Shanghai, and 110+ vessels in Los Angeles/Long Beach with delays stretching 25+ days.
These ports often experience high cargo volumes and infrastructure limitations, leading to significant delays. To mitigate these backlogs, conduct frequent supply chain optimization planning, leverage less congested ports, and invest in digital tools for better visibility and coordination.
Geopolitical tensions
Geopolitical tensions are most pronounced in the Strait of Hormuz, South China Sea, and Suez Canal. These regions are critical waypoints for global trade and are frequently affected by conflicts and political instability. Willingness to diversify supply chains, staying informed about geopolitical developments, and continuing to work with experienced logistics providers to navigate challenges remains the best course of action.
Asia
Asia–Europe
Annual contract negotiations on the Asia–Europe trade lane continue, with carriers attempting to maintain elevated rates through general rate increases (GRI). Despite these efforts, rates have begun to retreat due to low-capacity utilization. Expect carriers to remain disciplined in holding on GRI increases and plan for rates to remain elevated through January.
Asia–U.S.
Rates on Trans-Pacific (TP) routes have begun to slide, with U.S. West Coast (USWC) rates dropping by 12% the last week of November despite cargo volumes being 15% higher than 2023. This drop is due to a 17% increase in overall capacity, with no signs of capacity cuts from TP carriers.
U.S. East Coast (USEC) rates remain firmer due to October's capacity cuts, keeping utilization stable. Expect TP rates to stabilize in December with more blank sailings, influenced by the aftermath of the Canadian port strikes and the approach of Lunar New Year.
The Canadian dockworkers' strike, which affected Montréal, Prince Rupert, and Vancouver, has ended following the Canada Industrial Relations Board's directive to resume operations. West Coast ports resumed on November 14, 2024, and Montréal on November 16, 2024, but delays of up to two weeks are expected on the West Coast and up to one week in Montréal.
Europe
Environmental regulations, particularly the EU Emissions Trading System (EU ETS) implemented from January 1, 2024, are significantly impacting shipments from Europe. Ship operators are required to purchase carbon credits, which has the effect of increased operational costs. While this regulation aims to reduce carbon emissions it poses financial challenges for shipping companies. Investing in energy-efficient technologies and alternative fuels can help manage these costs effectively.
The European transport and shipping industry is also grappling with an economic slowdown and port congestion. Rising inflation, high energy prices, and falling consumption are causing increased operational costs and reduced demand for shipping services. Major ports like Rotterdam and Hamburg are experiencing significant delays due to congestion and sporadic labor strikes.
To navigate these challenges, optimizing supply chain efficiency, diversifying port usage, and investing in digital tools for better visibility and coordination are essential strategies.
Mediterranean/India
The shipping routes between the Mediterranean and India continue to adapt and evolve. Carriers are optimizing their schedules and reallocating vessels to meet the high demand, ensuring more reliable and efficient services. The introduction of new direct services and strategic adjustments in port calls help mitigate congestion and delays.
North America
U.S.–Asia
Carriers are seeing increased demand for services via the USWC due to extended transit times through the Cape of Good Hope and cargo diversions amid the risk of an International Longshoreman’s Association (ILA) strike in January 2025. This, combined with a longer-than-expected peak season and potential new cargo tariffs, has led to a 20–30% increase in volumes at USWC ports compared to 2023. Port congestion in Asia and at USWC ports is causing schedule unreliability and blank sailings.
Typhoon Kong-rey caused significant disruption in Taiwan and China, leading to backlogged vessels and congestion at Kaohsiung, Shanghai, and Ningbo ports. Transshipment ports in Asia, such as Busan, Shanghai, Ningbo, and Singapore, are experiencing delays of 14–21 days due to increased transshipment services.
ONE has mandated that cargo from several U.S. cities must move via USWC ports to balance rail activity. Additionally, ZIM is omitting Haiphong port calls for seven weeks due to dredging, while MSC has added Haiphong to its Chinook service and reinstated its Liberty service from USEC to Asia.
U.S.–Europe
Ocean carriers have reduced capacity on USEC services by downsizing vessels and reallocating larger ships to Asia, where demand is stronger. Increased blank sailings due to port congestion have tightened overall vessel space on this lane.
Additionally, the Ocean Alliance and Premier Alliance will merge their Trans-Atlantic trade services in February 2025, mirroring THE Alliance's existing services and further reducing market capacity.
Space from USWC to Europe is tighter than usual due to limited sailing options and cargo diversions during the ILA strike, with carriers overbooked on all-water services from Los Angeles and Oakland. As an alternative, CMA and OOCL offer rail service via Houston to Europe, requiring bookings 3–4 weeks in advance.
Meanwhile, Key West Mediterranean ports like Valencia, Algeciras, and Tanger Med face significant congestion due to diverted volumes, and Rotterdam and Hamburg ports are congested due to strong import volumes and sporadic strikes.
U.S.–LATAM
Schedule reliability to East Coast South America (ECSA) ports is impacted by significant delays and congestion at southern Brazil ports like Navegantes and Rio Grande, leading to blank sailings and port omissions. Heavy rains in the region exacerbate these issues, causing carriers to omit these ports and transship via Santos or other ports, spreading congestion to Itapoá and Paranaguá.
Space from U.S. Gulf Coast (USGC) to ECSA and West Coast South America (WCSA) ports is tighter due to delays at transshipment ports and southern Brazil ports. A one-day strike by port workers and customs officers' causing work stoppages in Brazil have added to the congestion. Increased transshipment cargo volumes are causing delays at main transshipment ports in Panama, Caucedo, Cartagena, and Kingston. Carriers like CMA and Cosco are adjusting their services to mitigate these delays.
U.S.–South Asia, Middle East, Africa (SAMA)
Monthly rate increases to the Middle East are due to unstable services and tight vessel space. Space from USEC and USGC ports to India and Middle East trade lanes is impacted by piracy risks in the Suez Canal, leading carriers to divert via the Cape of Good Hope, increasing transit times and blank sailings.
Services to Red Sea ports are suspended or rerouted via congested West Mediterranean ports. Limited services to Persian Gulf ports are further strained by piracy off Somalia and congestion at Southeast Asia and Jebel Ali ports.
Severe weather and congestion at Mundra and Nhava Sheva ports have complicated matters, causing delays and price increases in the South Africa market. Carrier alliances on the U.S.–India trade lane have led to blank sailings and space shortages. CMA's Indamex service plans to transit the Suez Canal are postponed due to risks. MSC's MECL service will switch to transshipment via Salalah port to improve reliability.
U.S.–Oceania
Due to ongoing congestion and operational issues at Charleston port, Hapag, MSC, and Maersk shifted their direct service to Savannah, but calls at Charleston resumed at the end of October 2024. With the peak shipping season underway, vessel space to Oceania is tight. Sporadic port omissions on the CMA PAD service have occurred due to delays at EU ports and adverse weather at AU ports, forcing schedule adjustments.
Carriers with transshipment services via Asia into Oceania are now primarily routing through the Panama Canal, as daily transits have nearly returned to normal.
Additionally, brown marmorated stink bug (BMSB) season is in effect, requiring fumigation for applicable cargo from North America.
Canada
The freight market remains generally soft, with tightness from the Canadian West Coast to western Canada due to seasonal freight moves and a lack of outbound loads from the United States. Thanksgiving week in the United States created increased congestion in western corridors as shippers rushed to dispatch month-end loads before the holiday shutdown. This congestion extended into the first week of December, followed by a slowdown as the market winds down for the year.
A potential 25% tariff on products from Canada to the United States, announced by President-elect Trump, is causing concern, particularly regarding the impact on freight flow and the supply of drivers, as Canada relies heavily on immigration for its driver workforce.
The national strike by the Canadian Union of Postal Workers has led to the suspension of international mail acceptance to Canada by USPS, severely disrupting mail processing and delivery. Although port strikes in Vancouver, Prince Rupert, and Montréal have been resolved, it will take weeks to clear the current congestion. Seasonal freight moves and holiday-related tightness continue to impact shipping schedules, so plan bookings and transit times accordingly.
SAMA
Capacity from India to all sectors is stable, but space from Asia to India is expected to remain tight due to blank sailings in December. CMA has cancelled its plan to reroute vessels via the Suez Canal to the USEC under the Indamex brand.
Currently, cargo demand is soft across all sectors, but it may increase in December for Europe and the United States as vessels arriving in January will meet post-holiday demand. Inventory is available at most locations except for sporadic inland container depots. Carriers have announced GRIs and peak season surcharges for December 2024 for routes from India and North America.
The rest of the sectors from India are likely to remain stable, though some blank sailings are expected in December for routes to North America and Europe. Rates from Asia to India will increase due to blank sailings from CMA and COSCO, creating pressure on space and prices. Ocean export cargo flow is likely to remain flat, but there may be a surge in cargo movement to the United States and Europe. Blank sailings from Asia to India will continue to create pressure on space and prices.
South America
LATAM
While the low season was delayed this year due to high demand, all trades are now open for regular negotiation opportunities. However, continue maintaining a 4–6 week forecast due to ongoing challenges at depots and terminals. To reduce container waiting times, carriers are releasing equipment two vessels ahead, and terminals are opening gate-in windows 48 hours before vessel operations.
Southern ports are experiencing several omissions due to port congestion, with Santos being the most reliable but still facing delays. Itajai resumed operations in September and is expected to balance cargo volumes with Navegantes and Itapoá in the coming months. In Manaus, the Negro River's water levels have stabilized since mid-October, though they remain below the historical average.