In his latest market analysis, McCown cited data from Container Trades Statistics (CTS), indicating that the global volume for the first nine months of 2024 totaled 136.7 million TEUs. This represents a year-over-year increase of 6.3% and a 1.5% rise compared to the same period in 2021.

Accompanying this robust volume was a substantial rise in rates. The average revenue per load reported by CTS increased by 52.5% year over year in Q3 and was up 23.4% from Q2. “The capacity constraints caused by the situation in the Red Sea, combined with strong volumes, resulted in a sector profit of $5.4 billion in Q1, which doubled in Q2 and more than doubled in Q3,” McCown explained.

The Shanghai Containerized Freight Index (SCFI) reported average global spot rates of $3,074 per TEU in Q3, more than double the rates from a year ago and up 19% from Q2.

McCown noted that net profits for carriers in Q3 amounted to $26.8 billion, reflecting a remarkable 164% increase from Q2 and nearly nine times higher than the previous year. This profit level is more than double what the industry earned in any full pre-pandemic year. This impressive growth follows a loss of $700 million in the last quarter of 2023.

Maritime consultancy Drewry predicts that container shipping will achieve a pre-tax profit of $50 billion this year, an increase from $28 billion in 2023. Although this represents a decline from the record $298 billion in 2022, carriers are entering 2025 with strong financial footing.

“Stronger-than-expected volumes have certainly supported rates, but much of the recent pricing strength is closely associated with the Red Sea situation, which is currently absorbing about 8% of global capacity,” McCown stated.

Anticipated Tariffs on Chinese Imports

Looking towards 2025, McCown emphasized that, in addition to ongoing diversions around southern Africa to circumvent the Red Sea, the proposed tariffs by US President-elect Donald Trump—ranging from 60% on Chinese imports to 10-20% on other imports—are increasingly likely to be implemented. These tariffs could coincide with a potential strike by the International Longshoremen’s Association (ILA) when its tentative contract extension expires on January 15.

HSBC also highlighted that these tariffs and possible ILA strikes could significantly impact volume growth for US imports in the coming months and into 2025. “We expect the anticipated labor union strike on the US East and Gulf coasts, along with an early Lunar New Year on January 29, to drive increased cargo frontloading as the year concludes,” the bank noted. Following the election of Trump, further frontloading is anticipated due to tariff concerns, which could keep freight rates elevated in the short term.

According to PIERS, a subsidiary of S&P Global, US imports from Asia increased by 10.5% year over year in October.

Optimistic Outlook for 2025 Earnings

Carriers are poised to benefit from elevated rate levels on east-west trade routes, with HSBC projecting that contract rates for Asia-Europe shipments will see significant increases in 2025 compared to this year, providing a substantial boost to earnings.

Ocean carriers are becoming increasingly optimistic about their capacity outlook for next year, as Red Sea diversions continue to absorb capacity. Demand is expected to remain strong into 2025, and the supply-demand balance could be stabilized through strategies such as increased scrapping and slow steaming.