Amidst complex macroeconomic conditions, including ongoing conflicts and escalating tax wars, the container market is cautiously awaiting a clear direction for the global economy to establish a new market cycle following the COVID-19 rate surge.
Freight Rates: The Rollercoaster Plateau
After peaking in 2021–2022, container freight rates saw a sharp correction in 2023, only to climb again in late 2024 and early 2025..
Freight levels have returned to normal compared to previous years, but still showing some stronger fluctuation, seemingly awaiting external decisions and their consequences. Volatility was significantly higher at 1.18% during 2023-2025, contrasting with the lower 0.64% observed during the pandemic years of 2020-2022.
Global economic growth is predicted to remain stable in 2025; however, ongoing global conflicts and the new U.S. Trump presidency are creating uncertainty. Rising protectionism, particularly from the U.S., and global tensions pose risks to this outlook.
The potential reopening of the Suez Canal could significantly impact shipping rates and carriers’ operational costs due to necessary service restructuring. The Suez Canal Authority has proposed discounts of up to 15% for large containerships. However, the high risks associated with Red Sea transit due to Houthi unpredictability will likely lead to the rejection of this proposal (during the past week another Panama-flagged product tanker vessel has been intercepted by Iranian forces).
Chart based on Drewry data
Vessel age & incidents
The global container fleet has undergone significant renewal over the past five years, with numerous new vessels delivered in 2023 and 2024. Despite this modernization effort, the average age of the fleet has continued to increase, although at a slower rate than in the 2016-2020 period, contrary to expectations. Such a trend can be attributed to the lower scrapping rate, and a high number of smaller vessels still navigating world seas.
Chart based on Alphaliner data
While low ship scrapping rates can indicate a strong freight market or global service issues, they may also foreshadow significant, often underestimated, negative outcomes.
A recent incident involving the 28-year-old feeder vessel MSC ELSA 3, built in 1997, which sank off the Indian coast two days ago, underscores the dangers posed by older ships. Although no crew were injured, the sinking of the vessel, which was carrying over 600 units, presents considerable safety and environmental risks. More than 100 drifting containers, some holding hazardous materials, have been found near Kochi. Additionally, over 450 tons of fuel are at risk, with minor spills already reported.
During the past few years MSC has been the main mover in the market, now undisputed leader of the market, the Swiss-Italian carrier grew its fleet especially via second hand acquisitions, enlarging its capacity but heavily affecting the average age and its side effects like claims and incidents.
The “clean” renovation of the global fleet will require not only a focus on newbuildings, but a gradual shift out of all old (+20 y.o.) vessels, which are currently representing 13.5% of the global container fleet.
