Market Situation – Compass – October '25

Market/Trade Information

Asia

• Asia-Europe ocean carriers are under mounting pressure to raise the rate levels on the westbound trade as the annual contract negotiation season draws closer. Shippers and forwards will soon be launching long-term contract tenders for 2026, and to drive up the spot market, carriers will need to apply aggressive capacity management actions, as otherwise they will be in a weak(er) position to negotiate rates.

• Golden Week and a number of void sailings have pushed rates upwards. Questions remain how long this market increase will stick. Over the course of October, the SCFI jumped +47%

• A Panamax vessel has made the China-Europe connection via the Arctic North-Eastern passage in a record time of 20 days. This is obviously a lot faster than the traditional route, even considering a passage via the Suez Canal, and it even beats the rail connection, which normally takes approx. 25 days. The ship sailed from Ningbo to Felixstowe, without the company of an ice breaker vessel. This is exceptional and all climate conditions need to be aligned to make this possible. From Felixstowe the vessel, operated by Sea Legend, continued towards Hamburg and Gdansk. This Arctic route cannot be seen as a full-fledged alternative to the traditional routing as it is only accessible 90-120 days per year (mainly from August to October). In 2024, the Arctic route covered 100 passages, compared to 13,000 passages through the Suez Canal in a ‘normal’ year.

• The U.S. tariffs have led to a shift in trading partners with South East Asian countries as the biggest winners so far. Indonesia has seen their exports to the U.S. rise 54% year on year. For Malaysia, the increase was 24% and for Vietnam 20%. China on the other hand, with import tariffs of an average of 30%, saw a 20% drop in exports to the U.S.

Europe/ Mediterranean / Black Sea

• Container operations at Europe’s largest ports have suffered again severely these past weeks (for example, due to lashers in Rotterdam, pilots in Antwerp, and Storm Benjamin across Western Europe). All these delays on the waterside will have a knock-on effect across North Europe and the U.K. on the landside (trucking capacity, yard density, etc.).

• Mid-November, CMA CGM will resume a call to the Russian port of Saint Petersburg. CMA will add the port on their feeder service between Germany and Finland.

• Steel imports from China to Belgium grew by 46% to 400,000 tonnes in the first three quarters of 2025. This puts China on a par with Belgian steel imports from India, Turkey, and South Korea. We have seen similar trends in other European ports. The European Commission recently announced its intention to halve the tariff-free import quotas for steel and to impose an import tariff of 50% (currently 25%) on volumes exceeding the import quotas. Europe is doing this to curb the dumping of foreign steel into the EU. Steel exports, on the other hand, weakened further, falling by 13.8%. Exports to the U.S. declined sharply in Q3 after a relatively strong Q2.

North and Central America

• Hurricane Melissa has left a trail of destruction across the Caribbean. The storm was classified as category 5, the highest classification, and it moved slowly over Jamaica, Cuba, and Haiti, with devastating power. In the Caribbean area, many container lines use the local ports as transshipment hubs on routes to and from North and South America.

Latin America

• Latin American countries are heavily impacted by the tariff application by the U.S.A. Not only is it hindering exports, but it is also causing a surge in import flows ex Asia (China) as the countries in Latin America form an alternative market. Rates from Asia to Latin America remain relatively high compared to Europe, but they have also seen a steep decrease.

• Out of Asia towards the South America East Coast main ports, still the highest volume trade, the schedule reliability across the board is the lowest of all trades at around 40% vs. a global market average reliability of 65-70%. This results in unpredictable rate fluctuation and congested port infrastructure. When comparing the schedule reliability out of North America, it is the opposite image. The schedule reliability on the East Coast of Latin America is the highest across all markets.

   

Red Sea and Gulf area

• The Suez Canal Authorities have confirmed the successful transit of the MV CMA CGM Benjamin Franklin, the largest vessel to pass through the Canal in the past two years. With a length of 399 meters and a width of 54 meters, the vessel has a capacity of almost 18,000 TEU. Its size makes this a true test of a potential return to the Suez Canal. This comes together with an official ceasefire declared by the Houthi rebels. In this open letter they declare they will no longer actively attack container ships passing the Bab el-Mandeb Strait. The passages of larger container vessels remain ad hoc, however, and no shipping line has yet confirmed an official or full-scale return. Apart from major network revamps, it is mainly the insurance companies who keep their foot on the brake.

General information

• IMO postpones the carbon tax for one year. The International Maritime Organization (IMO) has voted to postpone the adoption of the ‘Net-Zero Framework’ (NZF) due to pressure from U.S. President Donald Trump. With the NZF, the IMO wants to regulate carbon exhaust emissions in the maritime industry with binding reduction goals. A ratification is needed in the form of a majority vote to confirm the implementation as from March 2027. This has been postponed for a minimum of one year as President Trump threatened countries who supported this ‘Scam Tax on Shipping’, as he called it, with high(er) import taxes and visa revocations. The shipping industry needs to become carbon neutral by 2050. The IMO is the only international forum that can make rules for the entire industry on a worldwide scale. Without binding rules and clarity, the investments needed to make the ambition a reality will not happen.

• Carriers have achieved a substantial improvement in schedule reliability this year. The carriers are still not at pre-Covid levels (>80% reliability), but they are increasing the average reliability month on month. Shippers usually perceive the reliability as 10-15% less due to the omittance of ports, feeder dwell times, schedule changes and rolled cargo. The reliability is pushed upwards for the entire market by the high percentages reported by the Gemini Alliance from hub to hub. In practice, end to end, the reliability is often much lower than what is reported. Nonetheless, Maersk is edging towards charging a premium for providing industry-leading schedule reliability. According to Maersk CEO Vincent Clerc, Gemini has “broken some efficiency frontiers”. On the one hand, from a costing perspective, they have unlocked some serious leverage, and on the other hand, from a reliability stance, they could commercialize this as a premium service.

Special Topic: Levies on U.S.-owned or CN-owned vessels

• The port fees announced by both the U.S. and China have been suspended for one year. As a countermove to the imposed ‘penalties’ on Chinese-built vessels by the U.S. government, China announced it would levy fees on U.S.-owned, operated, built or flagged vessels calling at any Chinese port. Ships entering Chinese shipyards for repairs would be exempted. The fees would lead up to USD 56 per net ton in 2025 and go up every year until 2028 by USD 33 per year. China said it already started collecting the fees. The Gemini Alliance (Maersk and Hapag Lloyd), as a result, have removed Ningbo from their TP7/WC5 service, which connects Busan and Ningbo with Los Angeles. This service is operated mainly with vessels that sail the U.S. flag. This agreement was reached during a meeting in South Korea between President Trump and President Xi Jinping. During the meeting, several trade issues were discussed and resolved. The U.S. will suspend an extra 24% tariff which was imposed since April. In return, some deals were made on China’s export of rare earth minerals and the U.S.’s exports of soybeans.