Upply analysts present three possible scenarios for the development of the container transport sector in 2025. Although the forecast is prepared in a highly uncertain environment, experts highlight several constant trends affecting the industry.
Analysts note in the report several factors driving the increase in freight costs. In their view, market concentration is enhancing the power of the largest international freight forwarders.
“They expect significant profit margins in 2025 and have therefore set high freight rate targets, perhaps too high given the economic conditions in some markets,” the document states.
Additionally, despite a slowdown in inflation, this year is expected to see widespread increases in port dues and fees for services such as berthing assistance, pilotage, towing, and dredging.
“Terminal fees are also set to rise sharply almost everywhere around the world in 2025, as operators seek to recoup costs resulting from the inflation they have faced in recent years,” the report adds.
Another factor driving rate increases is the geopolitical situation. The crisis in the Red Sea has led operators on the Asia-to-Europe route to use an alternative, longer path around the Cape of Good Hope. This shift incurs fixed costs of about $1,000 per container.
In addition to these challenges, Upply highlights growing risks associated with digitalisation. Increasingly frequent cyberattacks are forcing companies to invest in technological security, while the transport of dangerous goods such as lithium batteries introduces new risks, including higher insurance premiums to mitigate fire hazards. The push for ecological transformation also demands significant spending on research and development of clean fuels and sustainable technologies. Furthermore, extreme weather events damaging strategic infrastructure, such as in the ports of Shanghai and Valencia, are adding to rising costs.
Factors that could mitigate rising costs
The report also identifies factors that could help mitigate cost increases. Ships ordered by shipping companies during the coronavirus pandemic are now entering the market in large numbers, especially on Asia-to-Europe routes. This trend is set to continue in 2025, with more than 10 mega-container ships expected to enter service. Given the cargo volume forecasts, filling these ships will be challenging, potentially leading to lower rates.
“In addition, the new shipping alliances scheduled to launch in February 2025 (editor’s note: the Premier Alliance comprising MSC, Japan’s ONE, South Korea’s HMM, and Taiwan’s Yang Ming) will aim to be competitive and establish a strong presence in their respective markets. As this new alliance takes shape, various operators are likely to gain additional market share,” the report states.
Reconfiguring maritime alliances could create new competitive dynamics, promoting operational efficiencies and reducing overall costs.
The report presents three potential developments in container shipping, each with strategic and operational implications that could redefine the global market.
Scenario 1: MSC dominates the market
In this scenario, Mediterranean Shipping Company strengthens its leading position, surpassing 20% of the global market share. With its modern, technologically advanced fleet and control of numerous port terminals, the company could reduce operating costs and set competitive shipping rates.
“When it comes to revenue, MSC employs a simple, proven formula that has enabled it to achieve the highest organic growth in the market over the past 30 years. This involves allowing a limited number of major shippers to generate substantial profits. To achieve this, MSC requires them to commit to purchasing large amounts of space on its ships at preferential rates unavailable on the open market. This approach rewards these major players for their intermediary role,” the report explains.
This strategy involves steadily acquiring market share with strong support from major international shipping groups, often German or Swiss companies. This explains MSC’s focused efforts to strengthen its presence in Hamburg.
“MSC thus positions itself as a market leader and locomotive, leaving other shipping companies with no choice but to follow suit as rates fluctuate. A recent example was in late 2024, when MSC opted to raise published prices ahead of the Chinese New Year while temporarily reducing capacity. Other shipping companies quickly followed,” Upply analysts emphasise.
Scenario 2: limited MSC dominance
The second scenario envisions decisive intervention by state authorities and institutions to curtail MSC’s dominance.
In the United States, MSC is involved in several lawsuits, including one that could lead to a $63 million fine.
“It remains to be seen how the new Trump administration will approach the company, which will operate independently from Maersk following a reorganisation of shipping alliances effective in February. Currently, Gemini, the new alliance between Maersk and Hapag-Lloyd, appears to be the United States’ preferred partner,” the report notes.
In Europe, the expiration of the block exemption for liner shipping consortia from EU competition law will subject shipping companies to general competition regulations. This raises questions about acceptable market shares for individual companies and how they are measured.
In China, amid an ongoing economic crisis, policy shifts could favour state-controlled companies like COSCO and OOCL. If a choice is required, CMA CGM’s long-term strategic alliance with these companies seems more favourable than MSC’s independent or non-Chinese partnerships.
Scenario 3: the United States as a maritime power
In the third scenario, the United States embarks on an ambitious strategy to reclaim its role as a maritime power. Despite controlling only 1% of global shipping capacity, a new industrial policy could promote shipbuilding and strengthen domestic logistics.
This transformation would rely on strategic alliances with South Korea and Japan, as well as partnerships with established players like Maersk and the Gemini alliance. However, such a revival demands significant investment and long-term political commitment.