This episode of the Freight Buyers’ Club, hosted by Mike King and created with the support of Dimerco Express Group, dives deep into the ongoing turmoil in the container shipping market. Renowned shipping and supply chain analyst Lars Jensen warns that even the restart of Red Sea routes won’t be a silver bullet for the industry.
Continued Volatility Ahead
According to Jensen, CEO of Vespucci Maritime, shippers should anticipate continued volatility in freight rates throughout 2025. The Red Sea crisis, which has forced many vessels to take the longer route around Africa, has significantly constrained global capacity and left the market vulnerable to further disruptions.
Ripple Effects on the Shipping Industry
Even if the Red Sea crisis were to be resolved, Jensen emphasizes that it would take a considerable amount of time for shipping lines to adjust their networks. The immediate impact would likely be a surge in port congestion in Europe as ships rush to take the shorter shipping route from Asia to Europe. This congestion would then ripple through the entire supply chain, affecting shipments from other regions as well.
What is the Outlook for 2025?
Jensen predicts that the most likely scenario for the coming months is an extended Red Sea crisis, resulting in continued high freight rates and market volatility. While a resolution of the crisis could lead to a temporary glut of capacity, it’s unlikely to cause an immediate crash in rates.
Looking ahead to 2025, Jensen forecasts a gradual softening of both contract and spot rates, assuming shipping traffic through the Suez Canal remains limited and there are no major supply chain disruptions. However, he warns that the traditional peak season surge in rates is likely to be less pronounced than in previous years due to the ongoing delivery of new vessels.
Solutions for Today’s Shipping Challenges
Visit this page to view other episodes of the Dimerco Freight Buyers’ podcast, which is produced for anyone with a professional interest in international trade, shipping, procurement, logistics and air cargo. The podcast features leading decision-makers, analysts, journalists, operators, and shippers who share their take on current freight and logistics markets and the challenges and opportunities.
Need help navigating today’s ocean freight market or any global logistics challenge? Reach out to Dimerco for solutions and expert guidance. Our team is ready to navigate these challenges and ensure resilience against potential supply chain risks.
