With the upcoming reorganization of the container shipping alliance in February 2025, the freight rate war on the Asia-Europe route has quietly begun. In the first two weeks of January, major shipping companies have lowered their freight rates to compete for market share.
According to Linerlytica data, the freight rate from Shanghai to North Europe rose slightly by 0.5% to US$2,962/TEU on December 27, 24, but this had fallen for three consecutive weeks before that. Freight rates fluctuated significantly in early January, with initial increases offset by subsequent price cuts, reflecting the instability of the market ahead of alliance restructuring.
As the alliance reorganization approaches, the market landscape will undergo major changes. MSC, the global market leader, will operate independently in February, and its former partner Maersk will join hands with Hapag-Lloyd to form a new Gemini alliance and withdraw from THE Alliance. The latter will be renamed Premier Alliance and continue to cooperate with MSC on the Asia-Europe route.
Although the Asia-Europe freight futures (EC2412 contract) closed up 4.4% to 3,445 points at the end of December 24, the performance of futures at the beginning of 2025 showed uncertainty. In particular, the February contract (EC2502) fell 13% in a week, reflecting market concerns that freight rates may fall sharply after the Spring Festival.
Linerlytica analysis pointed out that although the current space utilization rate is healthy, the insufficient increase in freight rates in January may indicate that freight rates will be under further pressure after the Spring Festival. For example, Maersk's freight rate quotation in January has dropped to US$4,800/FEU, which directly triggered other shipping companies to follow suit and reduce prices.
Short-term freight rate war intensifies: The intensity of the freight rate war in January will directly affect market trends in the coming weeks.
Price trend after the Spring Festival: The market predicts that freight rates will face greater pressure after the Spring Festival in February, especially the market chaos that may be caused by the alliance restructuring.
Long-term alliance impact: MSC's independent operation and the rise of Gemini cooperation may reshape the competitive landscape on the Asia-Europe route.
The turbulence in the shipping market is both a challenge and an opportunity for freight forwarders and shippers. How to formulate flexible shipping strategies in the freight rate war will become the key.
