Shipping giant Maersk expects strong demand and ‘another year of disruption’ for global trade in 2025

The past year has been a strong one for North American import trade demand, and that should continue for both ocean and air cargo into 2025, according to shipping giant Maersk, but so will supply chain disruptions.

After year-on-year growth in North American market imports of roughly 20%-24% across the first three quarters of 2024, Maersk expects the Q4 numbers to also be in double-digit territory, according to Charles van der Steene, president for Maersk North America, who described the full year 2024 as “very strong with resilient demand.”

The surge of e-commerce shipments from Chinese online sellers has also fueled air freight prices. Maersk is returning its China air cargo service to its South Carolina hub at the start of 2025. “The e-commerce market has been surprisingly strong,” said van der Steene.

But Van der Steene said shipping companies expect the volatility that has pervaded global trade since Covid to be back in 2025. “Disruption will also be with us,” he said. “The topic of resilience within the supply chain will continue to be, and should be, on everyone’s agenda.”

The disruptions include another potential International Longshoremen’s Association strike at East Coast and Gulf ports across the U.S., and tariff threats made by President-elect Trump ahead of an early Lunar New Year in Asia, when many manufacturing plants in China are idled for a month.

These threats have stoked the price of the cargo container as shippers vie for the coveted boxes to ship their imports. Over the last several months, ocean freight spot rates had been on the decline, but on Monday, when ocean carriers released their rates for the Dec. 15- Dec. 31 bookings, logistics managers told CNBC they jumped, a bullish demand indicator.

In ContainerXChange’s latest update, it reported North America has experienced the sharpest rise on a global basis, at 20%, in average container prices over the last 90 days.

The National Retail Federation recently said inbound cargo traffic as a result of strike and tariff threats would fuel container import records in both November and December.

Maersk has started to see a progression of trade moving over to the West Coast, Van der Steene said. With volumes remaining strong, “We can at least conclude that volumes are being pulled forward, or volumes are incredibly more strong now because of the anticipation of a potential disruption,” he said.

Trump takes sides in port strike

Automation is one of the main sticking points in negotiations between the ILA and the United States Maritime Alliance, which represents the owners of East and Gulf Coast ports. Maersk’s auto gate system in Mobile, Alabama, was the reason for an initial breakdown in talks over the summer, with the union alleging use of automation in violation of contract terms.

After the ILA strike on October 1-October 3, which shut down 36 ports on the East and Gulf Coasts, ended with a deal on wage issues and significant pay hikes for dock workers, the issue of automation was put off until a January 15 deadline for a full deal.

On Thursday, President-elect Trump met with ILA president Harold Daggett and his son, Dennis Daggett, who is executive vice president of the ILA, and came out in support of the union position after the meeting. Harold Daggett has vowed no use of automation as a firm union position. In a Truth Social post, Trump said the money saved by companies using automation “is nowhere near distress, hurt, and harm it causes for American workers.”

Trump added, “Foreign companies have made a fortune in the U.S. by giving them access to our markets.”

The Trump-Daggett meeting came at a pivotal moment after another breakdown in talks between the union and ports. The ILA, which is North America’s largest longshoremen’s union, and the USMX met on November 11 to discuss automation, healthcare benefits, work jurisdiction, and container royalties. But on November 13, negotiations broke down over automation.

USMX responded on Thursday in a statement that it appreciated and valued President-elect Trump’s belief in the importance of American ports, but said the union contract is about supporting American consumers and businesses through innovation and technology.

“To achieve this, we need modern technology that is proven to improve worker safety, boost port efficiency, increase port capacity, and strengthen our supply chains. ILA members’ compensation increases with the more goods they move – the greater capacity our ports have and goods that are moved means more money in their pockets.”

A strike that lasts longer than a few days would cost the U.S. economy $5-$7 billion per week, according to EY.

Van der Steene, in the CNBC interview conducted before Trump’s post, said Maersk is still “quite hopeful and mildly positive” that an agreement between the ILA and the USMX will be reached before the January 15 deadline when the contract negotiation period expires and another strike can begin.

The ILA has warned that if the U.S. president invoked the Taft-Hartley Act to force the striking workers back on the job, there would be an intentional slowdown. President Biden stuck to his position of not invoking the act when the ILA went on strike in October. Trump’s latest comments suggest he would not invoke Taft-Hartley either. Senior Biden administration officials have told CNBC they are urging both sides to get back to the negotiation table.

Global supply chain outlook for 2025

Next year will also bring a new ocean alliance for Maersk, starting in February, when the Gemini Corporation Agreement between Maersk and Hapag-Lloyd begins. The cancellation of Hapag’s China to Germany service raised some concerns in the logistics industry, and there have been concerns that the Gemini Alliance may be short of vessels, but van der Steene told CNBC it has enough vessels to meet demand.

Bookings for the new alliance began this week and van der Steen said the alliance is excited about orders and has set an ambitious goal of 90% vessel reliability for 2025. Red Sea diversions and the ILA strike contributed to delayed arrivals in 2024. Current ocean carrier reliability, according to Sea-Intelligence, is 50-55%. Maersk is the most reliable ocean carrier, at 58%.

“We will be quite prominently driving from that 58% all the way up to 90% in the course of 2025,” Van der Steene said. “That’s the only way which we believe we can get our customers to reduce their inventory; we can allow our customers to de-risk their supply chain, and at the same time, reduce costs and carbon footprint along the way.”

Overall in 2025, Maersk is expecting the market to continue to be strong, with U.S. GDP set to grow just under 2%, bolstering demand for supply chain services, whether Asian imports or trade flows between Mexico and the U.S., Van Der Steene said.

While the exact level of demand is difficult to forecast, current market strength is expected into the first half of 2025. “We should all be ready for a continued strong market,” he said. But he added, “We’re very much in deep discussions with our customers as to how they can prepare for what could be another year, or rather, what will likely be another year of disruption and the need for supply chain resilience.”

Read more at Global Rubber Market News

Reference : Global Rubber Market News