Maritime Trade- Significant developments affecting global trade

Key Highlights

• 1. Gemini Cooperation :

  • Maersk and Hapag-Lloyd recently announced their collaboration in the Gemini Cooperation, set to commence in early 2025.

  • The move strategically positions the carriers in response to the dissolution of 2M, prompting a shift in the dynamics of major East-West trades.

  • Analysis of the new network routing is pending, and its impact will be crucial for industry shipping

  2. THE Alliance Disruption:

  • Due to the Gemini Cooperation, ONE, Yang Ming, and HMM face some gaps that will need to be filled.

  • THE Alliance breakup will require carriers to reimagine their services to remain competitive.

  3. Ocean Alliance and Antitrust Concerns:

  • Ocean Alliance emerges as the largest operational player in 2025, but faces a potential antitrust challenge with the expiration of the EU liner shipping consortia exemption.

  • The end of this exemption may lead to investigations affecting CMA-CGM, COSCO, and Evergreen, impacting both resources and brand reputation.

  4. Red Sea Crisis Impact:

  • The Red Sea crisis continues, continued disruptions are expected, with military interventions leading to heightened risks for vessels.

  • Shippers are advised to plan for longer transit times becoming the norm for the foreseeable future.

  • The Israeli-Palestinian conflict, extended to involve Yemen's Houthi rebels, is disrupting the Red Sea route, affecting countries like Bangladesh.

  • Attacks on ships in the Red Sea have led shipping lines to divert through the longer Cape of Good Hope route, causing delays and cost increases.

  • Due to conflicts and security threats, global freight rates are rising.

  • Shipping lines are imposing additional surcharges, impacting the cost of shipping goods and potentially leading to increased consumer prices for imported goods.

  5. Suez Canal Revenue Decline:

  • Tonnage supply expected to remain tight, especially leading up to the holidays.

  • Previous Suez Canal disruptions in 2021 led to a daily trade holdup of $9.6 billion, causing global economic effects.

  • Carriers planning a significant number of blank sailings after Chinese New Year may contribute to the tight supply.

  6. Implications of Panama Canal Restrictions on Global Supply Chains

  • A reduction in canal transits by one-third could reshape seaborne trade flows.

  • Simultaneous slowdowns at Panama and Suez canals could have a significant combined impact.

  • Latin America and the East Coast of the United States heavily rely on the canal. Approximately 14% of seaborne trade to and from the United States passes through the canal.

  • About 100 million tons of cargo (35% of 2022 volume) may be affected, leading to diversions, longer durations, and increased costs.

Highlighting the above concerns is our way of keeping you informed so you can evaluate your supply chain and evolve with the emerging challenges.

Know that you don’t have to go it alone. We are here to discuss your cargo or solutions on particular lanes.

Please contact your South East World Wide (Chicago), Ltd. Sales Representative.