Freightos Baltic: Freight rates declined amid intensifying competition

The global freight market continued to face downward pressure as recent shipping alliance restructuring intensified competition, dragging rates lower. However, temporary demand-side support arose from frontloading activities ahead of key US trade policy decisions.

As reported earlier, the once-dominant 2M, Ocean, and THE alliances, which for a decade governed the vessel-sharing framework of the world's leading ocean carriers, have undergone significant reshuffling. Notably, Hapag-Lloyd’s departure from THE Alliance and Maersk’s withdrawal from the 2M agreement have disrupted previous market structures, leading to increased rate competition as carriers adjust their strategies in the evolving landscape.

The transpacific container rates extended their sharp declines from the previous week to a respective $2,659/FEU and $3,754/FEU, marking a 40% reduction from a year ago. 

Despite these headwinds, market support materialised from pre-emptive shipments ahead of anticipated tariff hikes by the United States. Data from the National Retail Federation (NRF) revealed that US ocean import volumes from November through February were approximately 12% higher than the same period last year. Projections indicate that volumes will remain strong through May before softening in June and July.

However, uncertainty looms over the sustainability of these demand trends, as upcoming US import barriers threaten long-term trade flows. Market participants are closely monitoring key dates, including 24 March, 01 April, and 02 April 2025. These milestones will mark a crucial hearing on port call fees, the release of reports addressing various trade issues, and the potential implementation of 25% tariffs on Canadian and Mexican goods covered by the USMCA.

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