Market situation – Compass – June '25

Market/Trade Information

Asia

• The pause in the U.S.-China trade war has caused shipping lines to inject capacity into this trade to cope with the booming cargo. According to Sea-Intelligence, a provider of research and analysis within global supply chains, the capacity on the Trans-Pacific trade grew by over 30% year on year in an 11-week period.

• Rates from Asia to Europe increased in June, mainly due to void sailings and the pressure of the Trans-Pacific trade rather than rising demand. To remain ‘relevant’ enough, the Asia-Europe trade needs to increase rate levels to guarantee the supply of containers and capacity.

Europe/ Mediterranean / Black Sea

• The ongoing congestion in West European ports is continuing to create problems. Shipping lines are desperately trying to find solutions but as mentioned in the previous letter, it remains a game of ‘passing the hot potato’. Maersk (Gemini Alliance) has cancelled Rotterdam on their Transatlantic service and has pushed more vessels to the already congested port of Antwerp.

• Swedish port operations were heavily disrupted due to a strike by the Swedish Dockworkers Union in the last week of June. Although no new strikes have been announced, no agreement has been reached yet either. Mediation talks are scheduled for July 8^th.

• Following extra tensions in Israel, Yang Ming is no longer accepting reefer cargo, hazardous materials or shipments with open top and flat rack cargo to Haifa and Ashod. Harmless cargo in dry containers can still be booked. Maersk however decided to put sailings to Israeli ports on hold entirely. Maersk's decision follows months-long pressure on the company by activists on issues related to Palestine. Maersk was said to have shipped U.S. military cargo which was sold to the Israeli army for use in the current conflict.

• The European Union is preparing to implement trade countermeasures against the United States, even if a new trade agreement is reached. This follows recent announcements by U.S. President Donald Trump of steep import tariffs on several countries, including Japan, South Korea, and others, though no new tariffs on European goods have been introduced yet. Despite ongoing talks, the EU is readying two packages of countermeasures targeting sensitive U.S. exports. The first, worth €21 billion, includes products like soybeans and agricultural goods. A second, more extensive package could affect up to €95 billion in U.S. imports, including aircraft parts, cars, and bourbon. Final decisions on countermeasures will depend on the outcome of negotiations and input from EU member states.

North and Central America

• In Canada, water levels in St. Lawrence River have decreased significantly with no forecast of any improvement soon. This has led to the application of a low water surcharge by many carriers when moving cargo to or via the port of Montreal.

• Due to the frontloading of cargo into the U.S.A. (to arrive prior to the higher tariffs), some additional pressure is being felt on the availability of warehouse space and inland connections.

Latin America

• From Western Europe to Latin America West Coast the market is pretty strong, leading to an implementation of a PSS by multiple carriers.

• Also rates out of Asia to Latin America increased in June. According to the Shanghai Freight Index, rates have more than tripled compared to the levels of May.

Red Sea and Gulf area

• The Iranian parliament endorsed a measure to close the Strait of Hormuz in response to U.S. air strikes on Iranian nuclear sites. If this happened, it would have an impact on shipping, not necessarily cargo-wise, but because the Strait is the world’s most critical chokepoint for oil transportation. The channel connects the Persian Gulf to the open ocean. With a potential blockage, Iran will attempt to hurt the U.S.’s economy through rising oil prices. The maritime industry is very dependent on the supply of oil for fuel, so it is one of the main cost drivers.

• Two commercial vessels, Eternity C and Magic Seas, were attacked and ultimately sank following drone and missile strikes in the Red Sea. These incidents follow a brief period of reduced activity in the area since mid-April. The attacks have reinforced the security risks in the region. As a result, major shipping lines continue to avoid the Suez Canal and Red Sea area. Current extended transit times and route adjustments will therefore remain in place for the foreseeable future.

General information

• Cosco reported to join Hutchison sale talks. Cosco shipping is reported to have joined the discussion over CK Hutchison’s U.S.$23 billion port asset sale affecting 43 ports in 23 countries. Cosco would have entered the conversation with a view to join the consortium created by MSC’s port subsidiary, Terminal Investment Limited (TIL), and BlackRock. The sale involves the two major Panama Canal Ports, Balboa and Cristobal. The control of the Panama Canal is seen as a potential threat to Chinese trade. Also the Panama authorities already mentioned that selling to TIL and BlackRock could jeopardize the neutrality of the canal. TIL and BlackRock hoped to sign an agreement in April, but no agreement has been reached on the terms so far. The exclusive agreement period will expire end of July.

• The phase-in of the East-West Gemini network is complete. With over 340 vessels operating within the network, the Gemini cooperation is finally settled. Based on the reliability reports, the Gemini schedule reliability is at 90.7% across all arrivals in April/May. In practice the experience is not the same, but improvements should be felt soon.