Regulatory Changes and Updates
As of January 1, 2025, the European Union Emissions Trading System (EU ETS) has expanded its coverage of maritime emissions from 40% to 70%, leading to a significant increase in related fees. Additionally, on April 1, 2025, the third phase of the Import Control System (ICS2 Release 3) will come into effect, covering maritime, road, and rail transport in the European Union, Switzerland, Norway, and Northern Ireland.
At the same time, the United States Trade Representative (USTR) has expressed concerns about the potential dominance of Chinese-built vessels in shipbuilding, given that 17% of ships heading to the U.S. were constructed in China.
Freight Rates
Since the beginning of the year, the Shanghai Containerized Freight Index (SCFI) has dropped by 17%, mainly due to the prevention of a labor strike at U.S. East Coast ports. Further rate volatility is expected due to changes in carrier alliances and ongoing events in the Red Sea. Forecasts suggest that up to 30% of westbound sailings from the Far East may be canceled.
Capacity and Fleet Utilization
After record growth in 2024, the increase in fleet capacity has slowed and is projected to be 5% in 2025. Global port congestion has reached a three-month high of 10.3%, particularly in Chinese ports ahead of the Lunar New Year, which could impact the transition to new alliance networks and lead to more voyage cancellations.
Currently, only 0.2% of the fleet (30 vessels) remains idle. Ships with a capacity of 16,000 TEU are becoming the industry standard as carriers move away from ultra-large container vessels.
Demand and Economic Indicators
There are concerns that the U.S. might introduce increased import tariffs earlier than expected, prompting shippers to accelerate their shipments to avoid higher duties. A seasonal decline in activity is anticipated after the Lunar New Year. December PMI data indicates restrained inflation in the goods sector.
Regional economic growth disparities have widened: the U.S. is outperforming other developed economies, while India is significantly ahead of other emerging markets. However, business confidence has declined worldwide.
Implementation of Import Control System (ICS2 Release 3)
The Import Control System (ICS2) is an electronic security system for goods destined for the European Union, Switzerland, Norway, and Northern Ireland, as well as for transit cargo passing through these regions. Its goal is to enhance the security of residents and mitigate risks associated with potential terrorist threats.
The third phase of ICS2, effective April 1, 2025, applies to maritime, road, and rail transport. A key change is the requirement to submit detailed information about goods in the form of an Entry Summary Declaration (ENS) before cargo arrival, including precise descriptions and corresponding Harmonized System (HS) codes.
Overall, the ocean freight market at the beginning of 2025 is characterized by significant regulatory changes, freight rate fluctuations, and shifts in fleet capacity, necessitating close monitoring and adaptation by market participants.
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