The global container shipping industry is navigating a period of uncertainty, with the potential reopening of the Red Sea and a wave of new vessel deliveries shaping market dynamics in 2025.
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The sector has witnessed a strong recovery in container throughput, driven by consumer spending and pre-emptive stockpiling in anticipation of trade tariffs. However, protectionist measures, overcapacity concerns, and geopolitical uncertainties are expected to impact profitability moving forward.
Market outlook: uncertainty and recalibration
According to ING Research, 'The potential resumption of the Suez route will be the most important factor for 2025.' While 85-90% of global container volume currently avoids the Red Sea due to security risks, a return to normal transit patterns would require months of recalibration.
Meanwhile, shifting trade policies—such as the recent 10% tariff increase on Chinese imports to the US—are prompting supply chain adjustments. Despite these challenges, global container volumes are expected to grow by 3% year-on-year in 2025 before potential headwinds emerge in 2026.
Freight rates and profitability trends
Container spot rates have steadily declined from their 2024 peaks. Shanghai-Europe rates fell to approximately $3,000 per 40-foot container in February, with US-bound shipments following a similar trajectory. However, long-term contract rates remain elevated, stabilising liner revenues for 2025.
'Roughly half of global container volume is contracted out to shippers,' ING analysts noted. 'Most large shippers rely on the contract market, which stabilises costs and offers a specific volume of slots.' Maersk, for instance, increased its contracted share from 60% in 2020 to 75% in 2024.
Despite falling spot rates, vessel charter costs remain robust. Mid-size containerships (3,500-8,500 TEU) continue to command rates of $41,000-$74,000 per day on 24-month contracts, reflecting the enduring impact of prolonged Red Sea diversions and strategic fleet management.
Overcapacity looms as new vessel deliveries surge
A significant increase in vessel supply is expected to challenge market equilibrium. As of early 2025, the global order book stands at 27% of existing fleet capacity, with Chinese shipyards dominating production. While a shift away from ultra-large vessels is evident, the sheer volume of new ships entering service will test market resilience.
Demolition activity, which had slowed in recent years, is expected to accelerate. ING predicts that 'catch-up demolitions could reduce capacity by over 5%' once Red Sea transits resume, as liners retire older tonnage to manage excess supply.
Strategic moves among industry giants
Major shipping companies are adapting to market shifts. Maersk, Hapag-Lloyd, and CMA CGM all reported strong financial performance in 2024, buoyed by high freight rates and re-routing. Looking ahead, Maersk forecasts global container growth of 4% in 2025 but warns of a 'greater supply-demand imbalance' should the Red Sea reopen mid-year.
Meanwhile, the industry is witnessing structural shifts. The formation of the Gemini Alliance between Maersk and Hapag-Lloyd signals a recalibration of shipping routes, with an emphasis on hub-based operations and improved schedule reliability.
With global trade patterns evolving, container shipping companies face a pivotal year ahead. While demand remains resilient, overcapacity pressures and geopolitical risks will determine the sector's trajectory beyond 2025.
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