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Shipping giant MSC announces: stop sailing! 丨 Maritime export logistics
Apr 01,2025
As freight rates continue to show a low trend, the global shipping industry giant Mediterranean Shipping (MSC) decisively, announced the cancellation of six trans-Pacific routes voyage. The decision was like putting a boulder on the surface of a calm lake, sparking thousands of waves in an instant and causing widespread concern both inside and outside the industry.
Container prices are now at their lowest since 2024. Delury's latest WCI Composite Freight Index clearly shows this grim situation: Compared to last week, the index has dropped by 4%, and now it is only $2,168 per 40-foot container. In a breakdown, trans-Pacific freight prices fell by 4%, Asia-Europe / Mediterranean freight prices dropped by 5%, and transatlantic freight prices plummeted by 7%, a staggering drop.
The reasons for this significant drop in freight costs are complex. On the one hand, the weakening of market demand has become a key driver of the decline in freight prices. The increased uncertainty in the global economy and the reduced activity of trade activities have led to a significant reduction in the demand for freight transport.
On the other hand, a strategic shift by carrier alliances has also played a major role in this, with their new decisions having a profound impact on the market landscape. It is worth noting that the fall in freight rates did not result from the anticipated early adjustment, but rather from a combination of complex factors. Meanwhile, the number of empty ships plummeted from 109 in March to 86 in April, a significant change that also contributed to the downward trend in freight rates.
In the face of such an unfavourable market environment, Mediterranean shipping reacted quickly. The company issued a notice to explicitly cancel six flights across the Pacific.
Specifically, this involves:
In week 14, the UK514A Chinook route connecting the Far East to Port-au-Prince, Vancouver and Seattle / Tacoma in the United States was cancelled;
During the 17th week, the GQ517N flight from Asia to the West Coast of the United States on Pearl, the GO517N flight on Orient, and the GU517W flight from Asia and the GN517E flight from America on the East Coast of the U.S. were canceled;
In week 18, the GE518E on the Empire route from Asia to the east coast of the United States was not spared.
Data from DeLurie on March 28 further revealed the grim situation in the industry. On the main trade routes of East and West, including the trans-Pacific, trans-Atlantic, Asia to northern Europe and the Mediterranean, From week 14 (March 31 to April 6) to week 18 (April 28 to May 4), 68 of the 713 scheduled flights were cancelled, representing a 10 per cent cancellation rate.
The Drury forecasting agency has issued a warning that the east-west route will face more severe challenges in the next five weeks. Among them, the cancellation rate is expected to be as high as 47% for eastern trans-Pacific routes, 28% for western trans-Atlantic routes, and 25% for Asia to northern Europe and the Mediterranean routes.
However, the agency also noted that despite the dire situation, about 90 per cent of ships are expected to operate as planned, although shelf reliability will decline.
Despite the clouds on the shipping market, carriers have not given up on their efforts. They cautiously tried to raise the Consolidated Rate Increase Surcharge (GRI) in April. The real dilemmas, however, are like unbridgeable gulfs.
Increasing market competition, the continued growth of fleet capacity and the temporary capacity absorption caused by disruptions in the Red Sea have all contributed to the problem of overcapacity. As a result of these factors, rates remain under significant downward pressure, the future direction of the shipping market is fraught with uncertainty, and industry change may have quietly begun.
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