Major Cargo Shipping Companies Announce Rate Adjustments Effective April 1, 2025

Carriers implement new bunker factors and emission fees

Several leading shipping companies have announced upcoming adjustments to their rate structures, set to take effect on April 1, 2025. These changes include updates to the New Bunker Factor (NBF) and New Emission Fee (NEF) levels, impacting Freight All Kind (FAK) cargo across various trade routes. For instance, ZIM Integrated Shipping Services has detailed its revised NBF and NEF charges, with NBF rates ranging from $194 to $650 per TEU, depending on the specific trade lane, and NEF charges varying between €41 and €235 per TEU.

In addition to ZIM’s adjustments, other major carriers have also updated their tariffs to reflect General Rate Increases (GRIs) effective April 1, 2025. Companies such as CMA CGM, COSCO, Evergreen, Hapag-Lloyd, HMM, Ocean Network Express (ONE), Yang Ming, and ZIM have implemented GRIs ranging from $1,000 to $3,000 per 40-foot container, depending on the carrier. These April rate increases are part of the carriers’ strategy to set higher rates ahead of the new service contracts that begin on May 1st, allowing them to negotiate more favorable terms.

These rate adjustments come amid a backdrop of dynamic changes in the global shipping industry, including the restructuring of alliances and the implementation of new operational strategies. Importers are advised to stay informed about these developments and assess the potential impacts on their logistics planning and costs.

FMC Investigates Global Maritime Chokepoints Amid U.S. Shipbuilding Revival Efforts

Assessing International Shipping Barriers and Enhancing Domestic Maritime Strength

The U.S. Federal Maritime Commission (FMC) has initiated an investigation into key international maritime chokepoints that significantly impact global shipping routes. These critical passages include the English Channel, Malacca Strait, Northern Sea Passage, Singapore Strait, Panama Canal, Strait of Gibraltar, and the Suez Canal. The FMC’s objective is to understand how foreign regulations, policies, or practices might be creating unfavorable conditions for U.S. shipping interests. Insights from this probe will inform the FMC’s annual report to Congress, aiming to identify and address potential challenges in these vital maritime corridors.

In parallel, the Trump administration is taking decisive steps to rejuvenate the U.S. shipbuilding industry. A comprehensive plan has been unveiled, proposing the establishment of a dedicated White House Office of Shipbuilding. This initiative seeks to offer special tax incentives to encourage domestic ship production and reduce reliance on foreign-built vessels. The administration is also considering imposing fees on Chinese-built ships docking at U.S. ports, with the goal of leveling the playing field for American shipbuilders. These combined efforts reflect a strategic move to bolster national security and economic resilience by strengthening the U.S. maritime sector. For a deeper understanding of related shipping policies, you can read our detailed article on the proposed U.S. shipping fees targeting Chinese vessels: How New U.S. Shipping Fees on Chinese Vessels Could Disrupt Global Trade & Supply Chains.

Major Shipping Lines Collaborate to Address India’s Overcapacity Challenges

CMA CGM and ONE negotiate vessel-sharing agreements

Facing increased overcapacity on India’s major trade routes, leading container shipping companies CMA CGM and Ocean Network Express (ONE) are in discussions to form vessel-sharing agreements (VSAs). These agreements aim to enhance service efficiency on routes connecting India with the U.S. East Coast and Northern Europe. Both carriers currently operate independently on the West India–U.S. East Coast corridor but have struggled with schedule reliability due to limited vessel availability and frequent void sailings. By joining forces, they hope to stabilize operations and better meet market demands.

The potential collaboration comes amid a broader trend of carriers reassessing their strategies to maintain competitiveness. For instance, ONE recently launched a standalone service connecting western India ports to the U.S. East Coast, moving away from previous consortium arrangements. Similarly, CMA CGM is adjusting its partnerships, particularly after Hapag-Lloyd’s exit from their joint India-Europe service. As the shipping industry continues to navigate challenges like overcapacity and fluctuating demand, such strategic partnerships are becoming essential for carriers to optimize operations and ensure reliable services for their customers.

Exploring Advanced Hub-and-Spoke Strategies in Container Shipping

Carriers consider streamlined networks to enhance efficiency

The container shipping industry is evaluating the potential of refining the traditional hub-and-spoke model to improve operational efficiency and service reliability. This approach involves centralizing operations around major hub ports with robust local markets and excellent connectivity, allowing carriers to optimize vessel utilization and reduce transit times. For example, the Gemini Cooperation—a strategic alliance between Maersk and Hapag-Lloyd launched in February 2025—has adopted this model, focusing on a limited number of key hubs where they have terminal ownership. By integrating in-house feeder systems and minimizing direct port calls, Gemini aims to offer a more reliable and efficient service network.

Implementing a more streamlined hub-and-spoke system could lead to significant cost savings and enhanced service reliability. By reducing the number of direct port calls and concentrating on major hubs, carriers can lower operational expenses, decrease fuel consumption, and improve schedule adherence. However, this strategy may result in fewer direct port pairings and reduced service frequency for certain routes. As the industry continues to adapt to evolving market demands, carriers must carefully weigh the benefits of such a model against potential trade-offs to ensure they meet customer needs while maintaining competitiveness.

Montreal Port’s Labor Stability Paves Way for Expansion

Strengthening labor stability is key to Montreal’s port expansion and future growth

The Port of Montreal is actively working to restore shipper confidence following recent labor disruptions. In November 2024, operations were halted due to a labor dispute, leading to a backlog of approximately 13,350 TEUs and 750,000 feet of freight cars awaiting export. The port’s leadership acknowledges that such instability has eroded trust among beneficial cargo owners and shipping lines. To address this, the Maritime Employers Association (MEA) and the Canadian Union of Public Employees (CUPE) Local 375 have entered a 90-day mediation process to negotiate a new contract for the 1,300 longshore workers. Achieving a mutually agreeable settlement is deemed essential for ensuring long-term labor peace and operational reliability at the port.

Concurrently, the Montreal Port Authority (MPA) is advancing plans for the Contrecoeur terminal expansion, aiming to bolster the port’s capacity by an additional 1.15 million TEUs annually, a 40% increase over its current capacity. This project is strategically significant as it positions the port to handle larger vessels and diversify its trade routes, especially in light of geopolitical tensions affecting traditional trade patterns. The Canadian government has recognized the project’s importance, investing up to $150 million to enhance national supply chain capacity. Securing labor stability is thus not only crucial for regaining shipper trust but also imperative for the successful realization of the Contrecoeur expansion, which is expected to generate substantial economic benefits, including nearly 8,000 construction jobs and an annual contribution of $140 million upon completion.

DP World and Maersk Unite to Boost Capacity at Brazil’s Port of Santos

Strategic partnership aims to enhance container handling

DP World and Maersk have entered into an eight-year agreement to expand operations at Brazil’s Port of Santos. DP World plans to increase the terminal’s capacity from 1.4 million to 2.1 million TEUs by the end of 2027. This expansion involves an initial investment of approximately $90 million to reach 1.7 million TEUs by 2026, followed by an additional $320 million to achieve the 2.1 million TEU target.

In tandem, Maersk will introduce six new services with eight weekly calls this year, escalating to seven services and ten weekly calls in 2026 as the terminal’s capacity grows. This collaboration is set to enhance operational efficiency and support Brazil’s burgeoning trade activities.

European Ports Struggle Amid New Shipping Alliances and Ongoing Disruptions

Congestion intensifies as alliance restructures

European ports are currently grappling with significant congestion due to a combination of factors. The restructuring of major shipping alliances has led to the phasing in and out of vessel plans, causing delays and operational challenges. For instance, Maersk and Hapag-Lloyd are integrating their new Gemini Cooperation services, aiming for full deployment by the end of the second quarter. Similarly, Mediterranean Shipping Co. is transitioning services from its 2M Alliance with Maersk to a standalone network, while the Premier Alliance adjusts to operations without Hapag-Lloyd. These shifts have resulted in some services running concurrently, leading to operational disruptions and schedule inconsistencies.

Compounding these challenges are external factors such as adverse weather conditions and labor strikes. Ports like Hamburg have experienced berth waiting times averaging 1.25 days, with terminal operators imposing container delivery restrictions to manage the congestion. In Rotterdam, container stacks have reached capacity, prompting terminals to halt acceptance of empty containers delivered by road to prevent unmanageable situations. Additionally, low water levels in the Rhine River have restricted the loading of containers for inland destinations, leading to surcharges and increased pressure on road and rail services. These combined issues underscore the complexity of maintaining efficient port operations amid evolving alliance structures and unforeseen disruptions.

Trans-Atlantic Air Freight Soars as U.S. Tariffs Loom

Automotive Sector Drives Unseasonal Surge in Air Cargo Demand

With the U.S. set to impose new tariffs on European Union imports starting April 2, there’s been a significant uptick in trans-Atlantic air freight activity. Businesses, particularly in the automotive sector, are rushing to ship goods from Europe to the U.S. to sidestep the impending 25% duties on imported cars. This urgency has led to an 11% year-over-year increase in air cargo volume from Western Europe to the U.S. in early March, pushing air freight rates up by 8% to nearly $5 per kilogram—levels typically seen during peak shipping seasons.

This surge is straining available air cargo capacity, with dynamic load factors reaching 76%, indicating a tight market. The situation is further complicated by a reduction in freighter capacity compared to the previous year, as carriers have redirected resources to other regions, such as the Asia-Pacific, to meet strong e-commerce demand. However, relief may be on the horizon as airlines prepare to roll out their summer schedules on April 1, traditionally adding widebody passenger flights to trans-Atlantic routes, which should increase belly cargo capacity and help stabilize rates.

Revised Employment Figures Highlight Shifts in Trucking Industry Dynamics

Updated figures reveal a tighter labor market and the rise of smaller carriers

Recent adjustments to U.S. employment data have shed light on notable changes within the trucking industry. The U.S. Bureau of Labor Statistics (BLS) revised its employment figures, revealing that trucking employment had been over-reported by 2% to 4% between 2022 and 2024. This correction indicates that the number of motor-carrier employees is now at its lowest since May 2021, with February’s payrolls totaling approximately 1.49 million—lower than pre-pandemic levels in 2019.

This downward revision underscores a significant shift: resources and employment are moving from larger carriers to smaller trucking firms. While larger carriers have reduced capacity since 2022, the number of small carriers with one to five trucks has surged, now representing about 90% of the truckload market. This transition suggests that, as demand rises, truckload capacity—especially among larger carriers—could tighten more rapidly. For shippers and freight brokers planning for 2025 and beyond, understanding this evolving landscape is crucial for effective logistics and supply chain strategies.

Railroads Struggle to Raise Intermodal Contract Rates Amid Weak Trucking Market

Persistent softness in the trucking sector hampers rail carriers’ pricing power

Major U.S. railroads are finding it challenging to increase intermodal contract rates due to ongoing weakness in the trucking sector. Despite efforts to secure higher rates, the market remains largely unchanged from previous years. In February, intermodal contract rates averaged $1.48 per mile, a slight decrease from $1.54 per mile the previous year. When excluding fuel surcharges, these rates have remained flat year over year, reflecting the ongoing softness in the trucking market.

Looking ahead, a new wave of annual contract negotiations is set to take place between April and June. Intermodal providers are hopeful for rate increases during this period. However, the outcome remains uncertain, as previous attempts to raise rates have been met with resistance from shippers, largely due to the competitive pricing in the trucking industry.

Marine insurance is crucial for businesses involved in shipping goods internationally. It provides comprehensive coverage that safeguards shipments against various risks and uncertainties during transit by sea, air, or land. This type of insurance is essential for ensuring that businesses can recover financial losses from potential damage or loss of cargo.

Importance of Marine Insurance:

• Protection Against Financial Loss: Covers the cost of goods lost or damaged during transit, ensuring businesses do not bear the financial burden alone.
• Risk Management: Helps manage and mitigate risks associated with transportation, including natural disasters, accidents, and piracy.
• Peace of Mind: Provides reassurance that goods are protected, allowing businesses to focus on operations without worrying about potential losses.
• Legal Compliance: Often a requirement in international trade contracts, ensuring that businesses meet legal and contractual obligations.
• Comprehensive Coverage: Includes protection against various risks such as theft, fire, and other perils specific to maritime transportation.

As the shipping industry continues to face new challenges, staying informed and adapting to changes is more important than ever. From evolving trade policies to rising freight costs, businesses must be proactive in managing their supply chains. At Southern Star Navigation, we are committed to helping our clients navigate these complexities with tailored solutions that keep their operations running smoothly. If you have any questions or need support, our team is here to help. Follow Bethany 🌎 Gabbett or call me to discuss 833-782-7628 Ext. 1.