With tight capacity, expert perception is that any unforeseen event could cause turbulence
Following a volatile 2024 with periods of soaring prices, container shipping freight rates are expected to begin 2025 at a more stable level but still under pressure. Experts anticipate some relief in prices next year. However, given the ongoing tight capacity in global logistics, the consensus is that any unforeseen event could once again trigger turbulence.
This year, various factors have caused bottlenecks in global shipping, leading to increased freight rates. Attacks in the Red Sea, which blocked flow in the Suez Canal, were among the main causes, alongside dockworker strikes at U.S. ports and congestion at Brazilian container terminals, according to Leandro Barreto, a partner at Solve Shipping consultancy.
On Brazil’s main import route, for products coming from Asia, the spot market freight rate reached $9,350 per 40-foot container in July—a level close to the peaks seen during the pandemic’s logistical chaos, according to Solve Shipping data. Today, the price has dropped to $5,300, but remains 130% higher than the same period last year and three times above the level recorded in December 2019, before the pandemic.
On the export side, the East Coast of the United States is a route currently affected by recent turbulence. In October, when American port workers went on strike, the price for the route reached $8,400 per 40-foot container. Today, the price has declined to $3,400.
According to Mr. Barreto, the main issue in global logistics this year was the attacks by the Houthis (a Yemeni rebel group) in the Red Sea. These attacks blocked the route for large ships in the Suez Canal, increasing costs and travel times for vessels.
“Last year, there was an expectation that freight rates would plummet because many ships were arriving, expanding capacity. The forecast was a 10% increase in ships and a 3% growth in demand. The problem is the Red Sea crisis alone consumed 13% of the market’s capacity, due to the congestion created,” he said.
Analysts do not foresee a quick resolution to the situation. “It’s hard to imagine that attacks in the Suez Canal will stop. So, this factor will persist into 2025 and might be the strongest reason for elevated freight globally,” said Andrew Lorimer, executive director at Datamar consultancy.
Analysts also highlight congestion at Brazilian container terminals as a major issue this year. In 2024, the sector struggled with the shutdown of a berth at BTP, a terminal in Santos, for much of the year due to an accident. Additionally, in Santa Catarina, Portonave’s terminal had its capacity reduced due to construction, and the port of Itajaí remained largely empty amid a turbulent operator change.
“We have significant bottlenecks at Brazilian terminals. This affects freight because shipping companies often incorporate terminal logistics aspects into their freight prices,” Mr. Lorimer explained.
For 2025, Mr. Barreto sees some positive developments that could alleviate some pressure. “BTP will not only resume with three berths but will also add two more cranes, which will improve productivity. Itajaí will also return with two berths, which helps. Additionally, shipping companies are looking to transport commodities to non-traditional ports, such as cotton from Matopiba [Maranhão, Tocantins, Piauí, and Bahia] diverted from Santos to Salvador, Itaguaí [RJ],” he noted.
Another factor that pressured freight rates this year was the strong demand for imports in Brazil, which, given the rise in the exchange rate, could also change in 2025, according to Mr. Lorimer. “This year, we broke record after record in importing Chinese goods. In the year up to November, it has already increased by over 20%. But this demand could be affected by the exchange rate. It’s possible that imports might decline somewhat or at least not continue growing at the same pace.”
On the export side, demand could increase with the exchange rate scenario, said Helmuth Hofstatter, president of Logcomex. “Exports may benefit from the depreciation of the real against the dollar, the decline in interest rates in the United States and Europe, and incentive packages in China,” he said.
Overall, industry experts project greater balance next year. “For 2025, we expect a more balanced demand and supply, with freight rates potentially decreasing—not to pre-Red Sea crisis levels, but with rates easing compared to September and October of 2024,” Mr. Barreto said.
Mr. Lorimer, from Datamar, predicts stability. “Freight rates will remain more or less at this level unless another geopolitical event worsens the situation. Something significant would have to happen in the Suez Canal to improve it. But we believe it will continue at the current level, ranging from $4,000 to $7,000 for importing containers from China to Brazil.”
Analysts emphasize that many uncertainties remain, which could at any moment reapply pressure and cause prices to surge. “Any ‘extraordinary event’ quickly pressures freight rates, which is why volatility has become the new normal in recent years. In other words, freight rates in 2025 will depend heavily on geopolitics, wars, strikes, natural phenomena, decarbonization regulations in the sector, among others,” Mr. Hofstatter said.
Source: https://valorinternational.globo.com/business/news/2025/01/02/maritime-freight-rates-drop-but-logistics-to-remain-under-pressure.ghtml
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