Ocean Market Trends Europe – East Asia

Transatlantic Contract vs Spot rates

Contract rates from Europe to the North American East coast decreased by 5% and spot rates dropped by 19% since December. This is likely the beginning of a downward trend of Transatlantic contract rates, mirroring what we have already seen in Ex-Asia. Shippers should prepare for discussions on this trade in upcoming tenders and refuse to settle for the status quo.

ECA in the Mediterranean

The Mediterranean Sea (including the Adriatic and Aegean Seas) will be designated an Emission Control Area (ECA) from May 1^st, 2025. This means that any ship operating there will be required to use fuel with a sulphur limit of 0,1%, as opposed to the standard 0,5%. This type of fuel has been more expensive than (V)LSFO (0,5%) in the past. The question remains whether shippers will be expected to absorb these extra costs or if carriers will invest the surpluses they generated over last few years.

Demand vs carrier capacity

Year-to-date decline of global shipped volumes is now standing at 3.7% compared with 2021. Due to the low demand, many ships’ voyages were blanked, however this a fine balancing position given the decline in rates.

China eases Covid rules at ports

Ships calling at Chinese ports are no longer required to provide 48-hour COVID test results for crew before arrival. Beside this, Erenhot, the largest land port on the China-Mongolia border and an important gateway for Europe-bound freight trains, removed all curbs on cross-border rail operations. The easing of COVID rules in China will improve the supply chain situation in the mid and long run, allowing goods to move smoothly without further delays. Due to an increasing number of post-lockdown infections in China, short term disruptions may occur over the next couple of weeks, as factories and logistics services are facing higher than normal numbers of illness.

Ocean Visibility

The days of lack of capacity and rolling of cargo at sky-high rates are over. Today we have overcapacity due to falling volumes and rates that have dropped dramatically.

As a result, the new normal is blanked sailings and cancelled loops, all in a year where new capacity will enter the market.

Shippers can expect prolonged transit times due to these voided sailings and rolled cargo. In addition, in several cases port pairs will no longer be served through a direct service, but through transhipment, rendering transit times again uncertain. This again stresses the importance of correct tracking and predicted ETA in this VUCA world.

Aligning ocean transport with on-carriage planning can only be realised with best-in-class predictive ETA solutions to seamlessly connect transport modes across the whole supply chain.