Market situation – Compass – April '25

Market/Trade Information

Asia

• The Transpacific rates already started to drop from the Chinese New Year holidays, and although most of the factories in China have resumed production since the second half of February, volumes are not expected to recover soon. The additional tariffs have led shippers to hold off on bookings from China. The pricing strategies differ among the shipping lines. Whilst many are still pushing for increases in the second half of April, also on the Far East to Europe trade, because of severe capacity reductions and expected seasonality, the effect of the tariffs in the U.S. might also cause extra volumes to be moved toward the EU. At the moment, no rate increase is expected, but the downward trend seems to have stopped.

• Air cargo rates on the Transpacific and Transatlantic trades were up again as shippers wanted to be ahead of the implementation of the U.S. import tariffs on China and Europe.

• China has announced tariffs of 125% on all U.S. imports in response to the U.S. tariffs on Chinese imports. China's tariffs came into effect on April 10th, one day after the new U.S. tariffs came into force. China remains the number three market for the U.S.’s agricultural exports.

Europe/ Mediterranean / Black Sea

Following up on previous customer letters, the situation concerning yard congestion is not close to getting resolved. The problem is not limited to Northern Europe, but because of the activity between Asia and Europe with the biggest operating capacity, the problems are maybe most acute there, as the yards are not able to guarantee a swift container throughput. This in combination with the strikes of the last weeks in Germany, France, Belgium, and the Netherlands have created a total mess of the planning at the terminals. Many yards have a current occupation ratio of +80% which results in additional delays because of a slower work pace to guarantee safety on the quays. Some terminal operators have blocked the gate-in of containers as they urgently need to evacuate containers from the quay before accepting additional ones. Others even went a step further and refused to allow container vessels with import cargo to berth: the terminals only loaded export containers and refused to discharge any import container as this would have only added to the already big mess. This has caused many changes in schedules with the shipping lines dropping containers in other ‘nearby’ ports to be delivered in a delayed manner.

Specific remark PSA Belgium: Yard Opening Time (YOT) is reduced from 8 days to 5 days before the ETA of a vessel

North and Central America

• Hong Kong-based CK Hutchison Holdings has agreed to sell its ports portfolio to the U.S. investment company BlackRock in partnership with TIL (Terminal Investment Limited), which is owned by MSC. The full portfolio of Hutchison is not limited to North or Central America but there is also a Panamanian subsidiary, Panama Ports Company, which operates the ports of Balboa and Cristobal at the Western and Eastern ends of the Panama Canal. The agreement does not include the ports operated in China by Hutchison. This news follows some turmoil caused earlier by U.S. President Trump, who claimed that the Panama Canal was controlled by China due to the involvement of Hutchison. China’s State Administration for Market Regulation, however, launched an antitrust review to prevent this sale from happening.

• The ILA, the union for longshoremen on the U.S. East Coast and U.S. Gulf Coast, have agreed a new 6-year employment contract for dockworkers. In October 2024, an agreement to increase wages by 62% was already reached, but there was still discussion about automation at ports. Now, fully automated systems have been excluded, but semiautomation, such as automated cranes, are being allowed.

• If the USTR’s proposal to penalize Chinese-operated ships goes through, all shipping lines would see penalties as high as $1.5 million per port call. What you read is correct, ‘per port call’, meaning that if we use an average of a 10,000 TEU vessel calling at four ports, at a penalty of (only) $1 million per call, there would be a $4 million total extra charge. Converted, this would mean $400 per TEU added cost, which would undoubtedly be passed on to cargo shippers via separate surcharges. On the Transatlantic trade, some vessels shifts could reduce the impact, but looking at the Transpacific trade, more than 50% of the vessels operating were built by China, and China has a nearly 70% grip on new shipbuilding orders. Only a few smaller carriers do not deploy China-built vessels on the TP trade. A few days ago, however, the administration of President Donald Trump began considering a softening of its proposed fee on China-linked ships visiting U.S. ports. The U.S. shipping industry had flooded the administration with negative feedback, warning that the proposed policy could be economically devastating. Among the changes under consideration are delayed implementation and revised fee structures aimed at reducing the overall cost for Chinese vessels calling at U.S. ports.

• On April 2nd, President Trump proclaimed “Liberation Day”, as the U.S. government announced tariff hikes on dozens of countries since April 9th . Although Canada and Mexico are largely exempted from this round of tariffs, potentially separate tariffs on steel, aluminum, and other commodities remain on the table for these countries.

• The top 5 contributors to the U.S. trade deficit (in Billion USD):

  • China / 270.4

  • EU / 213.7

  • Vietnam / 113.1

  • Taiwan / 67.4

  • Japan / 62.6

• In light of these deficits, President Donald Trump announced a complete three-month pause on all the “reciprocal” tariffs, except for those targeting China. In fact, Trump stated that they will increase to 145%, after China announced additional retaliatory tariffs against the U.S. earlier. However, exemptions were granted for smartphones, computers, and other electronics primarily imported from China. All other countries affected by the reciprocal tariffs will see rates reset to a standard 10%.

• APM Terminals (owned by Maersk Group) has acquired the Panama Canal Railway Company. The railway acts as an alternative for the Panama Canal passage to connect the Atlantic and Pacific Ocean in both directions. Certainly, with the move of BlackRock (MSC) on the Hutchison operation in Panama, it seems to be a strategic move by APM (Maersk).

 Latin America

• As a result of the Gemini Alliance, Cartagena Port has become a new hub for Hapag and Maersk. CMA will call at Sociedad Portuaria terminal, Gemini at Contecar and MSC at Compas.

• Port congestion remains a widespread problem across the whole of Latin America. Valparaiso, as one of the major ports in the region, has been unable to manage extra volumes which are arriving because of a shift from San Antonio to Valparaiso by Evergreen. This extra congestion has pushed PIL, Wan Hai, and Yang Ming to do the opposite move, shifting their services from Valparaiso to San Antonio.

• Volume predictions are uncertain as almost all Latin countries consider the U.S. as one of their major trading partners. For the local industries, the tariffs might give a reduced volumes output. To prevent a drop in local production, other sales markets are being investigated.

Red Sea and Gulf area

• U.S. airstrikes keep on pounding Houthi targets in Yemen. Airports, oil refineries, and missile sites are being targeted, as President Trump vows to use “overwhelming force” to stop the Houthis from targeting commercial shipping in the Red Sea. The U.S. says the campaign is working but since mid-March the Houthis have launched a dozen ballistic missiles at Israel and both missiles and drones at U.S. navy ships. None have caused major damage, but the threat remains very present. The Houthis even threatened to extend their range of targets to the UAE. The UAE is backing the rival government to the Houthis in Yemen’s civil war. By extension, Saudi officials say that their air defenses are on high alert.

General information

• The road to higher schedule integrity has begun. Hapag already reported for the first Gemini vessels that the sailing integrity is 92%, which is even higher than expected. Looking at multiple business cases, however, the perception on the market is very different. Transshipment cargo in Tanger, for example, has an increased transit time of 2-3 weeks. When challenging HLL with this information, the reply is simple: ‘These vessels are not yet considered as being part of the Gemini setup’, i.e., these ships and delays are not counted in the number of the 92%. The delays however are real and cannot just be ignored. HLL acknowledges this and expects big improvements ‘soon’. MSC is trying to challenge Gemini's sailing integrity with its standalone services. MSC is focusing on some specific ‘express services’ next to services which call at many ports. These ‘express services’ call at more specific ports and at a more limited number of ports in an attempt to offer very competitive transit times in the market. In parallel, MSC has bigger, slower services to manage capacity fluctuations and to have an escape if something unforeseen occurs. Ocean Alliance keeps the focus on capacity. It still operates the biggest allocation on the Asia-Europe connection and it keeps on the same course. It has chosen the middle path between the two other alliances, claiming to have best of both worlds. Premier Alliance can connect on a few MSC services but does not have access to the full MSC network. Not a lot of noise is heard from this alliance apart from the fact that they will continue the cooperation between the three of them (ONE, YM, and HMM). It seems they have chosen the same path as Ocean Alliance, offering stability and known services to the market. In February 2025, Gemini reported +90% reliability. By comparison, MSC is at 80%, Premier Alliance is at 60%, and Ocean Alliance, although they claim stability, only reached 54%. Schedule reliability does not mean ‘on-time arrival’: over 25% of Gemini's ships were delayed at European ports in March. According to Linerlytica, 935,000 TEU is anchored waiting to berth at North European and Mediterranean ports, accounting for 32% of the global container vessel fleet.

• Global demand outlook reduces to 2.5% GDP growth. This is the lowest growth forecast since 2009 (excluding the COVID-19 lockdown year), with the biggest forecast reductions in the U.S., Canada, and Mexico.

• The International Maritime Organization (IMO) has initiated a legally binding framework aimed at achieving net-zero greenhouse gas (GHG) emissions from ships by 2050. This decision was agreed during the Marine Environment Protection Committee which took place from 7 to 11 April 2025. The IMO Net-Zero Framework is notable for being the first to incorporate mandatory emissions limits and GHG pricing within the global shipping industry. It is expected to be formally agreed by the IMO in October this year. The US government, however, chose to withdraw from the global negotiations, stating that it would not support any agreement that “unduly or unfairly burdens the US.” A US representative also stated that “The US rejects any and all efforts to impose economic measures against its ships based on GHG emissions or fuel choice. Should such a blatantly unfair measure go forward, our government will consider reciprocal measures so as to offset any fees charged to US ships and compensate the American people for any other economic harm from any adopted GHG emissions measures.

These trends give the market changes on the spot market compared to 1 year ago, 3 months ago or 1 month ago.