Ocean Freight Market Update: Trends and Insights

The ocean freight market has been experiencing a surge in demand, with freight volumes increasing by 4% in the first quarter of the year. This growth is largely driven by the rise of e-commerce and the increasing demand for fast and reliable shipping.

Container shipping lines are struggling to keep up with this demand, with many experiencing delays and congestion at major ports. The average transit time for container shipments has increased by 10% over the past year.

The high demand for shipping has led to a shortage of container capacity, causing rates to skyrocket. In the first quarter, average container rates increased by 15% compared to the same period last year.

As a result, shippers are being forced to pay more for their ocean freight, with some seeing increases of up to 20% in their costs. This is a major concern for businesses that rely on just-in-time delivery to stay competitive.

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The ocean freight market is experiencing a mix of challenges and opportunities. Rates on Far East Westbound trade lanes have softened, despite attempts to impose general rate increases.

Global vessel reliability dipped slightly to 50-55%, while major ports like Singapore, Busan, and Piraeus continue to experience significant congestion. This congestion is causing delays and increased costs for shippers.

The shipping industry is accelerating its shift toward decarbonisation, but new EU carbon emissions surcharges are increasing costs. This is a trend that we're seeing more and more in the industry.

An 8% increase in capacity versus just a 3% rise in demand suggests blank sailings will be necessary to balance market conditions. This is leading to reduced capacity and potentially higher rates on certain trade lanes.

Here's a breakdown of the current demand outlook:

The Far East is projected to remain a critical driver of global container trade, contributing significantly to the 3.3% CAGR expected from 2026 to 2028. This is due to robust intra-Asia trade and strong export performance, particularly to North America and Europe.

Ocean container rates from Asia to North America saw a slight uptick last week, with rates from Asia to the U.S. West Coast up 10% week over week to $2,465 per forty-foot equivalent unit.

The ocean freight market is experiencing a slowdown in liner capacity growth, with a forecasted 5% increase for 2025, following a record jump in 2024. This slowdown is largely due to a shift away from ultra-large container ships (ULCS) and towards 16,000 TEU vessels, which are becoming the new standard.

Global port congestion has hit a three-month high, particularly at Chinese ports before Lunar New Year, with 10.3% of global port congestion. This congestion has led to a fully utilised liner sector, with only 0.2% of vessels idle, or 30 ships.

Capacity shortages are anticipated on key trade lanes, including Asia–North America and Asia–Europe, in February 2025, which could increase freight rates. Here's a breakdown of the expected market conditions for the next few months:

Freight rates are in decline across all trades, despite strong demand leading up to Chinese New Year, due to service disruptions and alliance changes.

Capacity has been a major concern in the liner sector, with growth slowing down after a record increase in 2024. The forecast for 2025 is 5% growth.

Global port congestion has been a significant issue, hitting a three-month high of 10.3% in February 2025, particularly at Chinese ports before Lunar New Year. This congestion has put a strain on the liner sector, which remains fully utilised, with only 0.2% of vessels (30 ships) idle.

The shift away from ultra-large container ships (ULCS) is becoming more prominent, with 16,000 TEU vessels becoming the new standard.

Here's a breakdown of the expected capacity trends for the next few months:

Freight rates are in decline across all trades, with rates continuing to fall despite strong demand leading up to Chinese New Year due to service disruptions and alliance changes. This trend is affecting various routes, including major East-West trades.

Global schedule reliability has remained steady between 50%-55%, but port congestion has reached a three-month high. This congestion is causing issues for shippers, with 10.5% of the global fleet (3.3 million TEU) currently stuck in port.

Our assessment across eight major East-West trades shows that freight rates are declining. If you need spot market container freight rate information on other routes, you can find more about our Container Freight Rate Insight (CFRI) online service, which covers over 790 global port pairs (updated monthly).

Our data and methodology are designed to provide a clear and accurate picture of the ocean freight market. We use a weekly index to track changes in the market.

The World Container Index is a key part of our methodology, and it's based on a set of correlations between tradelane indices and the main composite index. This helps us understand how different parts of the market are performing.

We follow a specific process to establish our weekly index, which involves analyzing data from various sources. This process helps ensure that our index is reliable and trustworthy.

Our tradelane indices are closely correlated with the main composite index, which gives us a comprehensive view of the market. This correlation is a key part of our methodology and helps us identify trends and patterns in the market.

By using a combination of data and methodology, we're able to provide a detailed and accurate picture of the ocean freight market.

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U.S. shippers have been frontloading goods since November to get ahead of tariffs, a trend that's expected to continue. This is partly due to the administration's plans to roll out country-specific reciprocal tariffs, which prompted another rush to move cargo before the new duties went into effect.

The U.S. hiked reciprocal tariffs on China to 125%, meaning that many imports from China will face up to 245% duties when combining all active levies. This has led to a significant increase in blank or voided sailings from China due to lower demand.

Freightos reported that many of those sourcing from other Asian countries have already started increasing their orders again in an effort to get ahead of possible tariff resumptions in July. This is causing high volumes at the Port of Los Angeles, which handled more than 2.5 million total twenty-foot equivalent units in the last quarter, up 5.2% year over year.

Executive Director Gene Seroka projects that port volumes will decline by 10% through the end of the year, starting as soon as May. This decline is expected to be driven by the decrease in shipments from China.

SEKO Logistics reported 11 canceled sailings originally scheduled for May, and Senior Director Clint Dvorak noted that they are seeing canceled bookings as well as increased requests for bonded warehouse solutions. This is partly due to the concern of abandoned cargo, with importers unable or not wanting to pay the increased tariff obligation.