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Increased ocean freight rates but still at depressed levels: International freight insights APAC April 2025

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Increased ocean freight rates but still at depressed levels. Access ZG’s indicators from Asia freight forwarders are that spot ocean freight rates offered by some carriers to Australia increased 100% for the March 2025 month (this follows a rapid decrease by up to a fall of 44% in the month prior). These March 2025-month international ocean freight observations show greater increases than the Index results stated below. This is due to extreme rate volatility and the index lagging by up to a few weeks the information Access ZG sees in both other metrics and on the ground with Asia freight forwarder and shipping line quoted rates.


A big theme with multiple articles in logistics journals recently is about the changed dynamics between shippers, freight forwarders and shipping lines. These changing trends show shipping lines with the leverage and increased will to further dictate conditions to freight forwarders in particular but also to shippers. These dynamics are explained in multiple articles below.


The China Containerized Freight Index (which is the best index for spot ocean freight between Asia and Australia) showed spot ocean freight rates China to Australia decreased 11% for March 2025 (following a 25% decrease for the February 2025 month). Rates in the final week of March however showed a 4% increase. Rates for China to all global routes decreased 11% over the same time period. Shanghai Containerized Freight Index which generally leads the China Index (as it uses data from quoted rates for the forthcoming week) decreased 10% over the same March 2025 time period. This index increased 5% in the final week of the month – indicating an increase to come in global rates.


Here’s a five-year chart comparing ex China to Australia & New Zealand ocean rates (in green), with ex China to South East Asia and all global rates ex China.


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The inversion of the China to South East Asia (in purple; down 1% for March 2025) and China to Australia / New Zealand line (in black; down 11% for March 2025) suggests (via Australia index rates being generally above South East Asia rates over recent history) that Australia rates are more deflated (by 13%) than neighboring routes and there is greater chance of increased rates in the short/ medium term.


The best container shipping futures market ex China (SCFIS) which is available for market trading only for China to Europe trade routes over the past month decreased for April 2025 expiring contracts (down 12%), however longer dated contracts were steady or had increases up to 6%. Based on the various dated futures contract rates it is implied that China to Europe rates (which gives some indication of future global rates) will increase 59% between now and end of August 2025 and then decline again after that to February 2026. This indicates in spite of current spot rates declining for this route there is still some nervousness about ocean freight rates rising sharply again.   


The next few weeks are likely to see increased but still depressed ocean freight rates during the yearly seasonal low (with this year like last year being an aggressively seasonal low) extending into mid-April at least. In 2024, rates were at a similar level with similar sentiment, seeming like low rates would be hanging around for some time, and they then spiked higher the following months. What happens mid-April and beyond has a totally mixed range of opinions from the experts with uncertainty being a common part of their opinions. There will likely be increases off the depressed seasonal rates but whether these are minor or major rate increases is to be seen. There’s many factors at play including some of the biggest shipping line alliances restructuring, whether the Middle East ceasefire holds as well as whether the ceasefire actually results in the near term of ships re-transiting the Red Sea. Also, at current rates shipping lines are making losses on China / Asia to Australia / New Zealand routes. They will increase blank sailings and will be trying all they can to increase rates and use any event minor or major as justification to do so and do so in tandem as they see other shipping lines increasing rates. Lastly, there’s the indirect impact of the threat of increased global tariffs and massive new US imposed fees on non-US built ships docking at US ports. Getting quality early information is as important as ever in this extremely volatile market.  


Worldwide air freight rates (full-market mix of spot rates and contract rates) increased 5% approximately for the month of March 2025 (per World ACD Air Cargo Market Trends report). However, Intra Asia Pacific rates increased by a stronger 8%, for the third straight month growing more strongly than the worldwide index. These increases come after sharp falls at the conclusion of the air freight peak season.


Prior International Freight Insights APAC newsletters can be viewed here: access-zg.com/blog

 

Reply to arrange a no obligation chat via your choice of phone call, Zoom online or face to face (for those based in Sydney) and see below for March 2025 high value article highlights:


Volatile ocean rates the stumbling block to index-linked contracts

 

CEO of Hapag-Lloyd Rolf Habben Jensen told a press briefing at S&P Global’s TPM25 event in Long Beach, California, the German carrier had seen a slight increase in index-linked contracts.  He said: “Index-based products sound really, really nice, and in some cases, also work. We have a fair bit of volume on index-based pricing.” Index-linked contracts track freight rates and offer periodic price adjustments to the agreed rate, and have been hailed as a way to ensure both shippers and carriers get a fair deal when large divergences occur between spot and contract rates. 

 

Indeed, Mr Habben Jensen explained that “index-based pricing only works if you have also a commitment on volume”. He said: “Because otherwise you will always see that when the index is up or down, dependent on what’s available in the market, people will not adhere to the contract.  “An index-based contract works if you say ‘we make a commitment to each other, and we’re going to be there whether it’s high or low’. You cannot make an index type of agreement only as a sort of a hedge – like you use it when you like it and you don’t use it when you don’t like it,” he added.  

 

 

Jury still out on the benefits of index-linked contracts for shippers

 

Freight index platforms are keen to push index-linked agreements (ILAs), but there are questions about whether a volatile market attracts or deters shippers and carriers from changing their contract style…. Anton Barr, VP market data at Freightos, said: "In this volatile environment, index linking is becoming more essential than ever. We're setting out to make this as accessible as possible with trusted indices, sample legal clauses, index pricing toolkit, and more." However, conversations during the Long Beach TPM event indicated that volatility may be a case against ILAs for shippers, rather than a catalyst.

 

"2025 is still a year where there's lots of known unknowns. In theory, that's just making ILAS attractive, because it de-risks it," said Ms McRoberts (Drewry's director of supply chain advisory). "But you have to be an innovator, you have to be the guinea pig, and I don't think shippers are feeling confident enough to do that right now. Back in 2015, we saw some adoption, but I think these days, shippers really want to control their pricing across all their lanes," she added.

 

 

Shippers turning to futures and longer-term contracts to manage risks

 

Daily turnover of Asia-North Europe (EC) container freight futures traded on the Shanghai Futures Exchange has reached US$1.5 billion. Speakers at the "Navigating the Volatility of Container Freight Rates" conference in Singapore today (24 March), said that years ago, interest in such futures wasn't high, but disruptions caused by the Covid-19 pandemic, the blockage of the Suez Canal with Ever Given in March 2021, the Red Sea crisis and geopolitical tensions, have made it necessary to hedge risks. ……He noted that the high trade volumes were achieved just 1.5 years after the futures were launched, with forwarders and cargo owners being the main traders. Tan said: "The timing couldn't have been any better. It came right after the Covid-19 pandemic and the disruptions that have driven a lot of attention to these container freight prices. Even after the correction we saw in 2023, which is when these futures were launched, the reception in the market has been really strong. But what's more fortunate is that the Red Sea crisis that erupted at the end of 2023 created another bout of volatility in the market, and futures market loves volatility. “This level of volatility and liquidity has been achieved, despite trading caps that have been placed by the futures exchange, which means the demand in the market is probably stronger than what these liquidity numbers suggest." ….

 

Another speaker, Journal of Commerce (JOC) Vice President Peter Tirschwell, noticed that shippers are now prepared to lock freight rates in. He alluded to Singapore-based furniture retailer Castlery, which announced in February that it had signed a 10-year index-linked shipping contract with Maersk Line. He explained: "It's risk mitigation. We all know what happens to (weekly) service contracts when spot and contract rates diverge. Those contracts come under pressure, and they break, and the two sides are focused on the contract, focused on pricing, and aren't focused where they really need to be, which is operations. In other words, getting freight moved. Therefore, an index-linked contract, where the shipper and carrier are riding the wave of pricing together, takes price off the table, in terms of their relationship. It de-risks the contract, makes it more likely that the shipper is going to get space on a ship, and cargo is going to move, even when conditions might get tight."

 

 

Transpacific sees first major MSC blanks as rates fall and volumes falter

 

Following nine weeks of consecutive declines in spot freight rates on the transpacific, carriers are finally beginning to pull capacity from the trade. Yesterday, MSC announced six transpacific sailings to be blanked, starting with next week’s sailing on the Chinook service that links the Far East with Prince Rupert, Vancouver, and Seattle/Tacoma, operated with eight vessels averaging 13,000 teu, and includes Zim-chartered slots. In addition, in week 17 it will blank two sailings out of Asia to the US west coast…

 

Liners cut long-haul sailings, but 'it won't be enough' to stop rates tumbling

 

MSC and the Ocean and Premier container shipping alliances are withdrawing some transpacific and Asia-Europe services in a bid to to stem falling freight rates, according to consultancy Linerlytica’s report this week…  But Linerlytica believes these capacity cuts won’t halt the downward pressure on freight rates. “Carriers’ half-hearted efforts to cut capacity on the Asia-North Europe route are doing little to support freight rates, as the planned 1 March rate hikes have fallen flat amid aggressive rate discounts.

 


Liners plan more rate hikes to halt renewed container spot rates decline

 

However, spot rate declines …. have occurred against a backdrop of relatively strong demand…This implies that rising capacity on the trade is outpacing growth, leading to falling vessel utilisation levels, suggested Sea-Intelligence chief executive Alan Murphy…. Several carriers have now published new FAK rate levels for implementation on 1 April to arrest the declines. Both Hapag-Lloyd and MSC have set the new FAK rate at $4,000 per 40ft between the Far East and North Europe. Meanwhile, expectations are that next week will show further declines.

 

 

DHL Ocean Freight Market Update March 2025


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Container shipping faces uncompromising economic reality

 

Dynaliner's analyst Darron Wadey told Container News: "If indeed it is true [that capacity is falling] it is not a surprise and would appear to herald what the fundamentals have been pointing to for a long time, namely, a period of substantial overcapacity." According to Wadey, from the end of 2020 to the end of 2024, global container shipping capacity increased by more than a third whilst global cargo volumes grew by less than 10%. "Maritime congestion, be that through epidemic or endemic, and the lengthening of supply chains (arising from the Red Sea situation) can only absorb so much of that difference," added Wadey, while also pointing out that, "the Cape of Good Hope diversionary route is already saturated." Sustained and widespread cuts to services have not yet occurred, and Wadey believes that carriers will first blank sailings, before laying up ships.

 

 

TPM: Weak Asia-Europe rates don't mean it's a weak market

Liner analyst Lars Jensen said…  in terms of supply, customers had “used a really stable environment for the last decade – we knew who the alliances were and what they offered”. But he added: “Now everything is changing; carriers are focused on getting the new networks up and running, which means blank sailings are not as effective as normal, and while this is under way, they are hanging on to market share.” He believed the falling market would be temporary, provided two main conditions were fulfilled: firstly, that there is no recession this year; and secondly, there is not a resumption of Suez transits, “Don’t confuse the current low rates for a structurally weak market,” he said, and sketched out the likely scenario should the Red Sea crisis come to an end and Suez transits resume.

 


TPM: Shipper-carrier power pendulum now swinging towards liners

 

Carriers have learned to say ‘no’, and are hiking contract rates as the shipper-carrier power pendulum swings in their favour.  Sanjay Tejwani, CEO of 365 Logistics, told delegates at S&P Global’s TPM25 this week he had noticed “changed carrier behaviour” from 2018.  “They started to have better capacity management and sometimes turned on business if it wasn’t profitable for them. During the Covid pandemic, they got first-hand experience that they could say ‘no’ and get away with it,” he explained.   And, according to Mr Tejwani, “that behaviour is now carried forward today”, when carriers “dictate terms to the customer” with a “take it or leave it” choice.  

 

“It’s a completely changed world, compared with eight or nine years ago, where the carriers are in a dominant position from a long-term perspective to set terms for their customers,” Mr Tejwani told delegates. While he believed rates would fluctuate in the short term, during this year’s tender season, he said, carriers “will generally push for higher rates”. “And if you have customers who are pushing rates down, like they did before the pandemic, carriers may sign [contracts] but that contract is only valid until the next disruption. “Once that happens, you can tear up the contract and they will revert back to the behaviour we saw in the past four or five years,” he warned.  

 

And Stephanie Loomis, head of ocean freight for Rhenus, added that while larger shippers “have more clout with carriers”, those shipping smaller volumes have less negotiating power – and these non-prioritsed SMEs are more likely to have shipments cancelled or changed. 

 

 

Lack of respect will dash carrier hopes of forwarding success

 

Shippers remain sceptical over the long-term future of ocean liners’ foray into freight forwarding, questioning their willingness to accept terms and conditions that level the playing field. James Hookham, director of the Global Shippers Forum (GSF), told The Loadstar carriers had entered the space with a “level of respect for their customers missing”. “If you look at the terms and conditions (T&Cs) carriers offer their customers, they are very much tilted in the carriers’ favour, based around broadly defined circumstances contained within the small print,” Mr Hookham said. “And, from their point of view, it is a masterful play, as it allows them, when the sun goes behind the clouds, to point to them and talk about surcharges.” For shippers, the past five years of behaviour by carriers, which he says has been “encapsulated by a rhetoric of surcharges” and what carriers can extract from their customers in times of difficulty, has generated a lot of “ill-feeling”.

 

 

TPM: Forwarders need 'clout' to survive as the ocean carriers move in

 

Ocean carriers undermining forwarders that don’t have “enough clout” will drive consolidation this year. Delegates at the recent TPM25 by S&P Global heard that, as the top 10 liner operators continue to grow and now have a monopoly of some 75% of the ocean shipping market, the “imbalance in the forwarding business has been exposed”.  This has meant smaller forwarders are being “undermined” by the large carriers, with shippers becoming increasingly sceptical of NVO promises of available capacity.  

Stephanie Loomis, head of ocean freight Americas at Rhenus Logistics, explained: “When the market is tough and the carriers need volume, the forwarders are their best friends, and as soon as it gets tense and there’s not as much space to go round, then it becomes even more important that you’re big enough.”  She said: “In order to have the clout with carriers to get what they need to service their customers, forwarders must represent a significant amount of volume.

 

 

TPM: Carriers' need for better yield puts more pressure on NVOs

 

Carriers have been managing NVO [non-vessel operator] compliance “much more strictly” in the post-Covid market, forcing them “to revamp their whole sales structures”.  In the past few years’ ocean shipping contracting, carriers have increasingly been pushing “an almost pervasive use of weekly string or port by port pair allocation plans” to monitor NVO compliance, according to Bob Fredman, principal at SF Global Insights.…   He said: “It is no longer ‘5,000 feu, great, where do we sign, we’ll figure out the allocation plan later’. It’s like ‘five this week on this lane, and six this week on that lane’. That has allowed the carrier to manage NVO compliance much more strictly.” Mr Fredman added that “if a couple of weeks in a row, you miss your five, it gives the carrier the opportunity to say ‘well, sorry, you only gave me two, the market’s strong, I’m only giving you [space for] two”.  He said this was one way carriers had been able to avoid holding space for long-term contracts, allowing them to improve yields in a more profitable spot market.  

 

Zim seeks more annual contracts after strong 2024 results

 

Breaking volumes down, Mr Destriau said, on the transpacific (which accounts for 45% of Zim’s total liftings) 65% had been exposed to the spot market, the remaining 35% subject to contractual commitments. He added: “We are still within last year’s contract period, but have initiated contract discussions, and we hope to move this towards 50% on spots and 50% contracted – but we will not do this at any cost. We have set ourselves a level and we will not accept rates below that level.” Although he would not be drawn on what that minimum level was. “That being said, it remains to be seen what the situation will be like on the spot side – it is trending downwards. We are out of Chinese New Year and now need to see if that trend continues,” he added. Asked if Zim was receiving requested for different contract types (for instance, longer durations), he said “not necessarily” for longer contracts, “instead, what we are seeing is some talk about deferring contracts. They don’t want to make a decision today and are taking more of a ‘wait and see’ approach to contracts”.

 

 

'It’s healthy competition' Maersk tells forwarders bidding for same business

 

Maersk said the “competition is on”, when asked what the future was for forwarders in the face of the company’s integrator strategy. Responding to a question from The Loadstar on the eve of a naming event for its latest methanol-fuelled vessel in Rotterdam, Maersk North Europe MD Ole Trumpfheller said Maersk was bidding for the same volumes as forwarders and described it as “healthy competition”. Asked if the carrier was trying to squeeze forwarders out, Mr Trumpfheller answered “yes”, although he emphasised Maersk was an integrator rather than a shipping line.

With the recent appointment of seasoned logistics executive Xavier Urbain to the Maersk board, the forwarding sector is thought to come under renewed focus at the company. “We are bidding for business and they are bidding for business; it is price and offering that wins,” Mr Trumpfheller continued, stressing that there was nothing underhand in the approach. “But because we control the assets, we have data and information way ahead of the forwarders. And we can dictate which box is offloaded first,” he added. Pressed on where this left forwarders, he noted that other carriers were also offering end-to-end solutions, and suggested forwarders would likely become “niche players serving special segments”. “They don’t like it, that’s for sure, but it’s healthy competition. It’s business,” he said. “What matters, reliability or pure cost? Forwarders do not control assets so their visibility is limited in that respect.”

 



Access ZG (access-zg.com) provides services to international logistics & trade participants, specialising in connecting with Asian markets.  

 

Thanks for taking the time to read and hope you gained some valuable insights,


Jeffrey Levy CA 

Founder

ACCESS ZG 

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