Maersk: Prepare for "Strong Demand" and "Market Turbulence" in 2025

According to news from the shipping industry website, a North American executive of shipping giant Maersk described the whole year of 2024 as having "extremely strong and resilient demand", and this strong momentum in sea and air freight will continue until 2025. Meanwhile, supply chain disruptions will also continue.

Charles van der Steene, President of Maersk North America, said recently that after North American market imports grew by about 20% - 25% year-on-year in the first three quarters of 2024, Maersk expects double-digit growth in the fourth quarter as well.

The surge in shipments from Chinese e-commerce sellers has also pushed up air freight rates. Maersk plans to relocate its China air freight route back to its South Carolina hub in early 2025.

He pointed out that "the performance of the e-commerce market is unexpectedly strong."

However, Charles van der Steene said that Maersk expects the "turbulence" prevalent in global trade since the pandemic to continue in 2025.

He said, "Disruptions will also be with us. Supply chain resilience will continue and should be on everyone's agenda."

Specifically, especially with the potential strike of the International Longshoremen's Association (ILA) in the East and Gulf coasts of the United States, and Trump Tariffs 2.0. These risks have pushed up container prices as shippers scramble to buy containers to send goods in advance. In the past few months, spot freight rates in the shipping market have been declining, but with the release of booking prices in mid-December, logistics managers have noticed a jump in prices.

The ContainerXchange report shows that in the past 90 days, the average container price in North America has seen the largest increase globally, reaching 20%.

The National Retail Federation of the United States said recently that the strike and Trump Tariffs 2.0 could lead to a record number of imported goods in the United States in November and December.

Charles van der Steene said that Maersk has begun to see a shift in trade to the West Coast of the United States, and the freight volume remains strong.

He pointed out that "we can at least conclude that due to the expectation of potential disruptions, shipping are being advanced, or the current freight volume is very strong."

Trump Takes a Stand

Automation is a key sticking point in the negotiations between the ILA and the United States Maritime Alliance (USMX). On December 12^th, Trump met with ILA President Harold Daggett and his son Dennis A. Daggett, and after the meeting, he expressed support for the ILA's position.

The USMX responded by saying, "We appreciate and value President-elect Trump's statement on the importance of American ports. It's clear President-elect Trump, USMX, and the ILA all share the goal of protecting and adding good-paying American jobs at our ports. But this contract goes beyond our ports - it is about supporting American consumers and giving American businesses access to the global market -from farmers, to manufacturers, to small businesses, and innovative start-ups looking for new markets to sell their products. To achieve this, we need modern technology that is proven to improve worker safety, boost port efficiency, increase port capacity, and strengthen our supply chains. ILA members' compensation increases with the more goods they move - the greater capacity our ports have and goods that are moved means more money in their pockets."

"We look forward to working with the President-elect and the incoming administration on how our members are working to support the strength and resilience of the U.S. supply chain and making crucial investments that support ILA members and millions of workers and businesses across the entire domestic supply chain, improving efficiency and creating even more high-paying jobs for ILA members."

ILA President Harold Daggett took a tough stance, "Hopefully, with President Trump's strong support, USMX will remove any language regarding automation or semi-automated equipment from their proposal so that we can reach a new master contract without any interference."

Charles van der Steene said that Maersk remains "cautiously optimistic" about reaching an agreement by January 15^th, although the threat of a strike still exists.

2025 Global Supply Chain Outlook

In February 2025, Maersk will end its cooperation with the 2M Alliance of Mediterranean Shipping Company (MSC) and instead start the "Gemini" cooperation operation with Hapag-Lloyd.

Despite concerns in the market that the "Gemini" may lack enough ships to meet the capacity demand, Charles van der Steene insisted that there are enough ships to meet the demand and bookings have been opened, setting a key target of achieving a punctuality rate of 90%.

Sea-Intelligence data shows that the current punctuality rate of global liner companies is between 50% - 55%, and Maersk performs the best, reaching 58%.

Charles van der Steene said, "By 2025, Maersk's punctuality rate will increase from 58% to 90%."

"This is the only viable way for customers to reduce inventory, helping customers reduce supply chain risks while reducing costs and carbon footprint."

Overall, by 2025, Maersk expects the market to remain strong. The US GDP is expected to grow by 2%, which will boost the demand for supply chain services, whether it is Asian imports or trade flows between Mexico and the United States. Although it is difficult to predict the exact demand level, the current strong market performance will continue until the first half of 2025.

He concluded, "We should all be prepared for a continuously strong market."

"Maersk is in in-depth discussions with customers on how to prepare for 2025, or more precisely, for a year that may experience ‘market turbulence' and ‘strong demand' again."