As big players grow in size, but shrink in numbers, the years 2025 unfolds as it will
 With US dock strikes a receding memory, Covid a thing of the past, and an end to Houthi rocket attacks on Red Sea shipping in force, the big question remains: What will the President of the United States do next - and/or, what are the probable results of what he has already done?
These are questions brave shipping analyst Agnieszka Kulikowska, writing in Wroclaw (aka Breslau), Poland's Trans.info portal, risked answering online.
Ms Kulikowska saw three scenarios head of for the industry in 2025. All included a future of excess capacity and fierce competition that will make it difficult for carriers to pass on costs to customers by raising freight rates.
Several factors will likely drive increased freight costs. "Market concentration is enhancing the power of the largest international freight forwarders," she said.
“They expect significant profit margins in 2025 and have therefore set high freight rate targets, perhaps too high given the conditions,” she said.
Additionally, despite a slowdown in inflation, this year is expected to see widespread increases in port dues and fees for services such as berthing assistance, pilotage, towing and dredging.
“Terminal fees are also set to rise sharply almost everywhere around the world in 2025, as operators seek to recoup costs resulting from the inflation they have faced in recent years,” she said.
There are also risks associated with digitalisation. Increasingly, frequent cyberattacks are forcing companies to invest in technological security, while the transport of dangerous goods such as lithium batteries introduces new risks, including higher insurance premiums to mitigate fire hazards.
Bureaucratic demands for ecological compliance also involve costly research, and the development of clean fuels and sustainable technologies. Furthermore, extreme weather events are damaging strategic infrastructure, such as in the ports of Shanghai and Valencia, have also add to rising costs.
She also identified factors that could help mitigate cost increases. Ships ordered during the Covid scare are now entering the market in large numbers, especially on Asia-Europe routes. This trend is set to continue in 2025, with more than 10 mega-containerships expected to enter service. Given the cargo volume forecasts, filling these ships will be challenging, potentially leading to lower rates.
In addition, the impact of new shipping alliances have yet to be weighed. The Premier Alliance comprising MSC, Japan’s ONE, South Korea’s HMM, and Taiwan’s Yang Ming, will aim to be competitive and establish a strong presence in their respective markets. As this new alliance takes shape, various operators are likely to gain additional market share.
Reconfiguring maritime alliances could create new competitive dynamics, promoting operational efficiencies and reducing overall costs.
Ms Kulikowska's report presents three potential developments in container shipping, each with strategic and operational implications that could redefine the global market.
Dividing the future into three parts, Ms Kulikowska assumes the Mediterranean Shipping Company (MSC) will continue to dominate the market, even strengthening its leading position, surpassing 20 per cent global market share. With its modern, technologically advanced fleet and control of numerous port terminals, the MSC could reduce operating costs and set competitive shipping rates.
When it comes to revenue, MSC employs a simple, proven formula that has enabled it to achieve the highest organic growth in the market over the past 30 years. This involves allowing a limited number of major shippers to generate substantial profits. To achieve this, MSC requires them to commit to purchasing large amounts of space at preferential rates unavailable on the open market.
This strategy involves steadily acquiring market share with strong support from major international shipping groups, often German or Swiss companies. This explains MSC’s focused efforts to strengthen its presence in Hamburg.
MSC thus positions itself as a market leader and locomotive, leaving other shipping companies with no choice but to follow suit as rates fluctuate. A recent example was in late 2024, when MSC opted to raise published prices ahead of the Chinese New Year while temporarily reducing capacity. Other shipping companies quickly followed.
The Polish analyst then considered scenario No 2 - limited MSC dominance. This envisions decisive intervention by state authorities and institutions to curtail MSC’s dominance.
In the United States, MSC is involved in several lawsuits, including one that could lead to a US$63 million fine.
It remains to be seen how the new Trump administration will approach the company, which will operate independently from Maersk in the new alliance arrangement. Currently, Gemini, the new alliance between Maersk and Hapag-Lloyd, appears to be the United States’ preferred partner. But who knows how long that will last.
In Europe, the expiration of the block exemption for liner shipping consortia from EU competition law will subject shipping companies to general competition regulations. This raises questions about acceptable market shares for individual companies and how they are measured, she said.
In China, amid an ongoing economic crisis, policy shifts could favour state-controlled companies like Cosco and OOCL. If a choice is required, CMA CGM’s long-term strategic alliance with these companies seems more favourable than MSC’s independent or non-Chinese partnerships.
Then comes Scenario 3, in which the United States become a major maritime power. Despite controlling only one per cent of global shipping capacity, a new industrial policy could promote shipbuilding and strengthen domestic logistics.
This transformation would rely on strategic alliances with South Korea and Japan, as well as partnerships with established players like Maersk and the Gemini alliance. However, such a revival demands significant investment and long-term political commitment.
Given the expense necessitated of Scenario No 3, involving Jones Act restrictions of building a substantial US-flagged merchant fleet built by Americans and crewed by Americans, the project seems impossibly, intractably impractical. Today, US ships only carry one per cent of the world's trade simply because foreigners do it far more cheaply.
Ms Kulikowska's other scenarios seem the more likely given the state of play on the high seas today, where the big players, be they forwarders or carriers seem to be growing in size but shrinking in number through further consolidation.
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