The market continues to soften as we enter the traditional slack period that begins around Lunar New Year. Rates are down week-over-week, though vessel space is tight for the final sailings out of Asia before holiday closings. Carriers have built up roll pools of volume to load after the holiday when they expect new demand to be low.
Following the Israel-Gaza ceasefire agreement last week and the Houthis announcement over the weekend that they plan to scale back vessel attacks, there are many discussions across the industry about the possible end of the Red Sea crisis. Global ocean carriers have announced they are still monitoring the situation and will return to Red Sea routes only when it is deemed safe. For the duration of the crisis, excess vessel capacity has been absorbed by longer Cape of Good Hope routings. When the Red Sea becomes passable again, it is widely expected that a period of major schedule and port disruption will ensue, followed by overcapacity on global trades. Ocean carriers will try to rebalance capacity by scrapping vessels and employing blank sailings, but most industry analysts agree that rates are likely to fall once the initial disruption is worked through, at least until the next ocean freight disruption or volume surge.
Carriers are looking for forecasts for Q1 and the rest of the year ahead of contract negotiations for the 2025-2026 ocean freight cycle. Please be sure to keep your CVI customer service representative posted on forecasts and shipping needs.
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Rachel Shames
VP, Pricing & Procurement
CV International, Inc.