As we approach 2025, the global container and shipping industry is at a challenging crossroads. Geopolitical changes, new environmental requirements and market fluctuations are shaping the industry’s future, while opening doors to new opportunities. Lars Jensen, CEO and partner of Vespucci Maritime, shares his insights and forecasts on how the industry can navigate its way forward.
Challenges in the Red Sea and east coast of the USA
The Red Sea remains a dangerous area for shipping, despite the number of attacks having decreased. To avoid the threats, major shipping companies are being forced to redirect their routes south of Africa – a solution that increases costs and extends transport times.
Lars Jensen warns that reopening the Suez Canal could create new problems. A sudden influx of ships to European ports could cause serious bottlenecks, equipment shortages in Asia and falling freight prices.
‘When the Suez Canal reopens, we should expect serious bottlenecks’, says Lars Jensen.
On the other side of the Atlantic, labour disputes at US ports are also posing a major challenge. The strike on the east coast at the end of 2024, although short, revealed deep disagreements around automation. The International Longshoremen’s Association (ILA) continues to oppose automation, even in its simplest form. With a new contract date set for January 2025, there is an growing risk of new conflicts, which could have long-term consequences for shipping.
High demand and new networks
Despite the challenges, demand for container transport has grown strongly. In 2024, global demand, measured in container kilometres, increased by 25-30%, showing the resilience of the industry.
The new network alliances starting in 2025 could reshape the rules of the industry. Direct connections and hub-and-spoke models are increasingly being used, which creates variation in the market. According to Lars Jensen, the key to success is understanding customer needs and tailoring networks to changing trading patterns. The differing shipping companies’ strategies will be a hallmark of 2025, he says.
‘Without advocating either direct connections or hub-and-spoke models, I would advise transport buyers to carefully analyse their network choices based on their specific supply chain needs, as direct lines are not automatically the fastest’, says Lars Jensen.
Adaptability – a survival strategy
Geopolitical uncertainty is continuing to grow. Trade wars, sanctions and high tariffs are creating new challenges for global supply chains. Jensen highlights the example that Chinese goods on their way to the US are sent via Mexico to avoid customs duties – a solution that reflects the increasing complexity of world trade.
Geopolitical conflicts are expected to increase, which could create more barriers to trade. At the same time, regions such as India are expected to play a greater role in global shipping, as manufacturing diversifies away from China.
To manage these uncertainties, Jensen emphasises the importance of building robust and flexible supply chains. Investing in resilience is crucial to cope with disruptions such as the Red Sea crisis or port conflicts. The problem, according to Jensen, is that few are willing to invest in this during stable times – even though this is when the foundations for resilience should be laid.
‘Companies that are prepared to invest in resilient supply chains in stable times create major competitive advantages during crises’, says Lars Jensen.
In the long term, Jensen predicts that major fluctuations will remain a standard factor in the maritime industry. Price fluctuations, driven by geopolitical changes, new environmental regulations and changing trade patterns, will keep industry players on their toes. ‘Companies that adapt to these changes proactively will have a major competitive advantage’, he concludes.
Source: APM Terminals
