The Changing Maritime Landscape and What It Means for You

This week brings pivotal changes to the maritime industry, with significant events influencing global trade and logistics. From the formation of new carrier alliances to disruptions in critical trade routes, stakeholders are navigating a shifting landscape. Highlights include the launch of the Gemini Cooperation, challenges for THE Alliance, ongoing Red Sea disruptions, and restrictions at the Panama and Suez Canals. Understanding these developments is crucial as we adapt to emerging challenges and rising costs. As your trusted freight forwarding partner, we remain committed to providing insights and solutions for seamless logistics.

Gemini Cooperation Takes Center Stage

• Maersk and Hapag-Lloyd recently announced their collaboration in the Gemini Cooperation, set to commence in early 2025.
• The move strategically positions the carriers in response to the dissolution of 2M, prompting a shift in the dynamics of major East-West trades.
• Analysis of the new network routing is pending, and its impact will be crucial for industry stakeholders.

THE Alliance Faces Strategic Challenges

• With Maersk and Hapag-Lloyd realigning, remaining carriers in THE Alliance (ONE, Yang Ming, and HMM) face strategic uncertainties.
• The dissolution of THE Alliance prompts a need for carriers to explore new paths or redefine their offerings to remain competitive.

Ocean Alliance and Antitrust Concerns

• Ocean Alliance emerges as the largest operational player in 2025, but faces a potential antitrust challenge with the expiration of the EU liner shipping consortia exemption.
• The end of this exemption may lead to investigations affecting CMA-CGM, COSCO, and Evergreen, impacting both resources and brand reputation.

Red Sea Crisis Impact

• The prolonged Red Sea crisis prompts the expectation of continued disruptions, with military interventions leading to heightened risks for vessels.
• Shippers are advised to plan for round-Africa services becoming the norm for the foreseeable future.
• The Israeli-Palestinian conflict, extended to involve Yemen’s Houthi rebels, is disrupting the Red Sea route, affecting countries like Bangladesh.
• Attacks on ships in the Red Sea have led shipping lines to divert through the longer Cape of Good Hope route, causing delays and cost increases.
• Due to conflicts and security threats, global freight rates are rising.
• Shipping lines are imposing additional surcharges, impacting the cost of shipping goods and potentially leading to increased consumer prices for imported goods.

Suez Canal Revenue Decline

• Tonnage supply expected to remain tight, especially leading up to the holidays.
• Previous Suez Canal disruptions in 2021 led to a daily trade holdup of $9.6 billion, causing global economic effects.
• Carriers planning a significant number of skipped sailings after Chinese New Year may contribute to the tight supply.
• Potential change in tonnage dynamics anticipated later in February, with the delivery of many big newbuildings.
• Uncertainty lingers as the Red Sea situation remains unresolved, impacting shipping routes and necessitating diversions.

Implications of Panama Canal Restrictions on Global Supply Chains

• A reduction in canal transits by one-third could reshape seaborne trade flows.
• Simultaneous slowdowns at Panama and Suez canals could have a significant combined impact.
• Latin America and the East Coast of the United States heavily rely on the canal. Approximately 14% of seaborne trade to and from the United States passes through the canal.
• About 100 million tons of cargo (35% of 2022 volume) may be affected, leading to diversions, longer durations, and increased costs.

Industry Trends