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Rate volatility is now strongly on the downside: International freight insights APAC March 2025

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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 25% for the February 2025 month. Rates for China to all global routes decreased 17% 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 23% over the same February 2025 time period.


Drewry Composite Index that measures ocean freight rates globally decreased 20% for February 2025. Drewry Intra-Asia Container Index showed rates decreased 16% for February 2025.

 

Here’s a two 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 17% for Feb 2025) and China to Australia / New Zealand line (in black; down 25% for Feb 2025) suggests (by technical analysis) that Australia rates are more deflated than neighboring routes and there is greater chance of increased rates in the short/ medium term.


Access ZG’s indicators from Asia freight forwarders are that spot ocean freight rates offered by some carriers to Australia decreased by up to a rapid fall of 44%. These February 2025 international ocean freight observations show greater falls than the Index results stated above. 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.

 

The best container shipping futures market ex China (SCFIS) which is available for market trading only for Asia to Europe route strengthened for China to Europe trade routes over the past month for April 2025 (up 17%), June 2025 (up 43%) & August 2025 (up 40%) contracts. 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 continue to see depressed ocean freight rates during the yearly seasonal low (with this year like last year being an aggressively seasonal low) of February extent into March. 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 late March and beyond has a totally mixed range of opinions from the experts with uncertainty being a common part of their opinions. 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 frontloading of inventory due to supply chain uncertainties. 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) decreased 5% approximately for the month of February 2025 (per World ACD Air Cargo Market Trends report). However, Intra Asia Pacific rates increased 2% for the second month bucking the trend of decreasing air freight rates on the worldwide index.


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 February 2025 high value article highlights:

 

Carriers need to cut more capacity for March GRIs to hold

 

“There’s a two-tier dynamic going on, with Gemini dropping spot rates and other carriers holding firm comparatively,” one forwarder told The Loadstar. However, he added that “long term rates on the table still remain elevated and we don’t see any carriers capitulating yet”. “Freight rates continue their downward trend despite the rise in blank sailings, ” it said. “This decline is primarily driven by the seasonal post-Chinese New Year slowdown, which traditionally leads to reduced demand. “Cancelled sailings are set to rise from 104 in January to 133 in February, but it seems that this adjustment in effective capacity deployed is unlikely to be sufficient to offset the broader market pressure caused by slowing demand, resulting in an overall decline in rates on the major east-west routes,” it is said in its weekly cancelled sailings tracker.


 

Blanked voyages fail to halt sliding spot rates, and March GRIs will be resisted

 

Blanked sailings and general rate increases (GRIs) have failed to arrest the drop in Asia-North Europe freight rates, with slot utilisation less than 95% amid the post-Chinese New Year slack period. The reduction in cargo volumes in North Asia after Chinese New Year has helped to ease the congestion at Chinese and South Korean ports. With 30% to 60% of the regular capacity departing from Chinese ports blanked in the past two weeks, vessel activity has slowed considerably, allowing ports to recover from the recent high volumes.

 

 

Ocean carriers hold contract rates 'at a decent level', as spots tumble

 

While spot rates across the major deepsea trades have been on the decline since the turn of the year, long-term contract rates appear to be heading in the other direction, according to new analysis from freight rates benchmarking platform Xeneta. While spot rates are heading towards worrying territory for carriers, anecdotal evidence suggests that, in contract rate negotiations, carriers have managed to maintain pricing discipline. “Despite the spot rate drops, long-term rates have maintained at a decent level,” Zencargo’s VP of global ocean freight, Anne-Sophie Fribourg, told The Loadstar in a recent interview. “2025 long-term rates on the Asia-Europe trades are being agreed at quite light levels,” she added.

 

 

Price war as carriers compete for cargo driving down container spot rates

 

It is still way too early in the year to determine whether we will see a repeat – current demand levels appear depressed, but the sentiment at the same point last year was very similar. “Factory production in some regions has yet to fully recover [from Chinese New Year], resulting in limited shipping volumes. Box liners continue to lower freight rates to attract cargo,” they said. In response, carriers are lining up a series of general rate increases (GRIs) from the beginning of March to try and reverse the depressed pricing trend that is now several months long. “As we approach March, the surge in capacity is expected to put further pressure on shipping rates, diminishing the likelihood of success for the speculative general rate increases announced by carriers from 1 March,” the analyst noted today in its Blank Sailings Tracker.

 


Hapag-Lloyd increases Asia-Oceania rates

 

German ocean carrier Hapag-Lloyd has announced a new General Rate Increase (GRI) for shipments from Asia to Oceania. The rate increase will apply to dry and reefer containers, as well as high cube equipment, and will be effective from 1 March until further notice.

Hapag-Lloyd said the GRI will be US$300 per TEU.

 

 

DHL Ocean Freight Market Outlook February 2025 Key Points


• Continued rate volatility expected from service disruptions from Alliance reshuffling and developments in the Red Sea.

• Blank sailings Far East westbound of 30% expected.

 

 

'Hands on triggers' over Gaza a threat to early Red Sea return

 

There have been “notable increases” in maritime insurance premiums, as ceasefire uncertainty clouds the prospect of a late-March return to the Red-Sea by ocean carriers. After the 19 January ceasefire agreement in Gaza, The Loadstar reported that the president of the Suez Canal Authority was eyeing a late-March return to transits – but the news this week makes this increasingly tenuous.  Houthi spokesperson Al-Houthi responded in a televised speech: “Our hands are on the trigger and we are ready to immediately escalate against the Israeli enemy if it returns to escalation in the Gaza Strip.”  A Drewry analysis pointed out: “There is too much noise surrounding events that impact on container shipping to confidently predict its course in the short-term.  “It seems sensible to wait for things to actually happen and then re-consider.” In Drewry’s shipping stakeholder survey, 54% expected a return to the Red Sea before the end of the year, with 29% not expecting until 2026.

 

 

Carriers should 'share some of the risk', say shippers eyeing new contracts


James Hookham of the Global Shippers Forum said “uncertainty” did remain, and shippers needed to rethink their approach to their carriers. “If I were a shipper, I think I’d be wanting to start a different conversation with the carriers, rather than making the traditional binary choice between contract or spot rates,” he said. “They want to be provoking shipping lines into agreeing to share some of the risk; to move away from the very transactional approach, agreeing to something other than surcharges. Acknowledging that it may be “a very short conversation”, Mr Hookham said that if enough shippers pushed carriers into accepting a greater degree of flexibility – suggesting some form of indexed system as a possibility – both sides could gain the certainty they seek.

 

 

More volatility means forwarders and shippers need to work more closely

 

As uncertainty knocks trade confidence, forwarders need to be closer than ever to their customer, delegates at last week’s World Cargo Summit in Bruges heard. Global head of airfreight at Scan Global Logistics David Wystrach told delegates “a major takeaway from discussions with customers” was that “no two supply chains are alike”. He advised forwarders that, not only did they need to be in the business of forwarding, but should also be an expert in their shippers’ industries “to be best equipped for volatility”.  

 


Changing Transpacific dynamics to shape vessel demand and contract discussions

 

Taiwanese shipping veteran Bronson Hsieh said at a seminar this week that US President Donald Trump's trade war against China will increase demand for small and mid-sized container ships as manufacturers shift supply chains to Southeast Asia and South America to circumvent tariffs. Speaking at a seminar organised by the International Ocean Freight Forwarders & Logistics Association in Taiwan, Hsieh said: “I believe that there is no need to build ultra-large container ships anymore. The situation in the past where ultra-large ships could be fully loaded just by docking at Chinese ports has changed. Most ports in Southeast Asia can only accommodate boxships of up to 8,000 TEUs.”

 

Hsieh noted: “Some freight forwarders think that it would be difficult to negotiate flexible terms without handling tens of thousands of containers a year. Forwarders should approach

liner operators that have expanded their fleets substantially in recent years, as they have more room for negotiation.”

 

 

Digital innovations reshape container shipping processes

 

The recent release of the Digital Container Shipping Association's (DCSA's) Booking 2.0 and Bill of Lading 3.0 standards marks a significant milestone. These digital initiatives are not just about adhering to new regulations; they represent a paradigm shift towards a more interconnected and transparent global trade environment. The introduction of these standards by DCSA creates a uniform framework that promises to reduce the time and cost associated with container shipping dramatically. Parallel to these developments, the concept of Maritime Autonomous Surface Ships (MASS) is evolving, as detailed in a comprehensive analysis by Lloyd's Register. MASS technologies are setting the stage for autonomous vessels that could soon navigate the seas, driven by Al and advanced sensor technologies.

 

 

Global liner alliances retrench


THE Alliance will become the Premier Alliance, with Ocean Network Express (ONE), HMM and Yang Ming Marine Transportation as partners, and Mediterranean Shipping Co (MSC) helping plug gaps on Asia-Europe trade lanes. MSC is ditching Maersk in the 2M vessel sharing agreement to largely go it alone, and Germany’s Hapag-Lloyd subsequently exiting THE Alliance to join the Danish carrier in what will be called the Gemini Cooperation. The only grouping remaining intact come February 1, the Ocean Alliance, made up of COSCO, OOCL, CMA CGM and Evergreen.

 


Container traffic surges at port of Melbourne 


Port of Melbourne handled 289,000 TEUs in January 2025, achieving a 4% increase over the same month in the previous year. A breakdown of container volumes at a major Australian port shows mixed growth across categories. Full imports (excluding Bass Strait) edged up by 0.2% to 115,000 TEUs, while full exports (excluding Bass Strait) climbed 4.6% to 46,000 TEUs. Full Bass Strait volumes increased by 3.1% to 16,000 TEUs, and full transshipment cargo saw a sharp rise of 15.8% to 26,000 TEUs. Meanwhile, empty containers grew by 5.9% to 85,000 TEUs, reflecting broader trends in port activity. At the same time, non-container trade at the Port of Melbourne surged by 16.3%, reaching 2.01 million revenue tonnes (RT). Motor vehicles drove the increase, soaring 48.7% to 832,000 RT, while liquid bulk rose 9.8% to 439,000 RT. Dry bulk volumes climbed 17.1% to 357,000 RT and break bulk cargo expanded by 13% to 112 RT.

 


US temporarily reinstates de minimis exemption for Chinese shipments

 

The US has temporarily reversed its decision to block the de minimis exemption that allowed packages worth less than $800 to be imported into the country duty-free.

A statement from the White House said that the exemption would be reinstated while systems are put in place to process the millions of de minimis - or section 321 - packages that US customs processes each day. The removal of the de minimis exemption was part of a wider decision to implement tariffs of 10% on goods from China and seemed to have caught the parcel and package sector unprepared.

 

The number of de minimis shipments coming into the US has risen rapidly in recent years with the rise of e-commerce players such as Temu and Shein, which are thought to be responsible for around 30% of e-commerce heading into the US. At present, it is unclear how long it will take for CBP to put in place the systems required to process that many packages.

 


Air cargo faces a year of volatility

 

Air cargo needs to “embrace volatility”, a leading industry analyst told the World Cargo Summit in Ostend on 28 January. “We are living in a highly uncertain environment,” Ludwig Hausmann, senior partner at consultant McKinsey & Co told the Summit. Powerful tail winds are supporting the industry strongly, he said, mentioning 12% growth last year and tight capacity. However, there are equally powerful headwinds with the US moving to protectionism by adding regulatory measures that could affect e-commerce – a big talking point throughout the Summit - topping the list.

 



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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