Episodes of exclusive TPM content featuring interviews of key stakeholders and attendees.
WATCH NOW
The must-attend conference for the trans-Pacific and global container shipping and logistics community
LEARN ABOUT TPM
Red Sea shipping diversions will dominate shipper-carrier relationships on the Asia-Europe trade lane through 2025 and hamper the on-time performance of ships at ports on both ends of the corridor. The Houthi attacks that removed the Red Sea as an Asia-Europe option in late 2023 came as an unpleasant surprise for shippers, and a welcome relief for oversupplied carriers, but the container shipping industry will go into 2025 with the longer voyages now baked into ocean schedules. That, unfortunately, doesn’t translate into improved on-time performance with both Asia-North Europe and Asia-Mediterranean trade lanes recording schedule reliability of less than 50% for much of 2024, according to Sea-Intelligence. Even as demand began to slow in the last quarter of 2024, ports in Europe and Asia were reporting a significant increase in congestion and carriers were struggling with equipment shortages. Carriers have penciled in a return to the Red Sea for the second half and some analysts are using that as a baseline for their market outlooks, but the reality is that no one knows. Should the midyear prediction be correct, it will immediately see an estimated 10% of excess capacity soaked up by the diversions around Africa returned to the market, creating chaos at overrun ports and putting downward pressure on rates. Still, the excess capacity may not be as severe as initially thought, with ocean carriers pulling hard on capacity management levers such as slow steaming, scrapping and blanking sailings to limit the supply overhang. Demand also is expected to slow with Europe’s major economies facing uncertainty over persistent core inflation, policy directions and geopolitical conflicts that are dampening the near-term outlook. In this unclear environment, a panel of industry experts will discuss what lies ahead for Asia-Europe and the lessons learned from a volatile year that cargo owners can draw on to shape their 2025 approach to the trade lane.
In the past five years, the periods without severe supply chain disruption can be measured in months. Getting cargo to destinations on the major ocean trade lanes out of Asia has been a nightmare for shippers struggling to find space on ships and paying enormous premiums for the privilege. When ocean is unavailable, cargo owners look to the air to move at least some of their products, but they again pay a heavy price. With disruption now such a regular part of global supply chains, there is too much going on for cargo owners to be surprised every time a shipment is delayed/rolled/allocation canceled/transit time extended, etc. In the new e-commerce-dominated air freight world, air cargo no longer can be an afterthought for traditional ocean shippers. Chinese e-commerce platforms such as Temu and Shein — and don’t forget Amazon, where 71% of products on its platform are made in China — are siphoning huge amounts of space from conventional air freight as they contract capacity directly from airlines and leave forwarders scrambling to find space for customers. This effectively kept air cargo in peak-season mode all through 2024. While there is much talk about lowering the generous US “de minimis” threshold under which no duty is paid, it is unlikely this will have any impact on e-commerce demand. Space constraints in air won’t just be a short-term problem with Boeing and Airbus unable to accelerate freighter production or even meet existing orders for new planes. In this session, expert speakers will look at the state of the air freight market and what cargo owners can expect in another tumultuous year for global supply chains. But crucially, the panel will explore what lessons cargo owners and forwarders can learn from their air cargo usage over the past year and whether permanent changes can be made in the way shipments by air are planned to avoid unpleasant surprises every time the ocean supply chain gets choked up.