Global Shipping Market Overview: Q2 & Q3 2024 Analysis

The global shipping industry continues to show dynamic trends in demand, supply, and profitability as we approach the end of 2024. This report provides an in-depth analysis of the key indicators shaping the market, including global volumes, fleet capacity, utilisation, and environmental impact.

In Q2 2024, global volumes on deepsea routes reached 30.4 million TEUs, surpassing estimates for Q1 2024, Q2 2023, and pre-pandemic levels in Q2 2019. Specifically, volumes were approximately 4% higher than Q1 2024, 6% higher than Q2 2023, and 7% above Q2 2019.

When looking at year-on-year (YoY) performance, the Far East to and from North America emerged as the fastest-growing trade lane, with increases of 11% and 9% respectively. The Far East to Northern Europe and Mediterranean routes also showed strength, with a 4% increase in the eastbound direction, though westbound traffic marginally contracted by 0.2%. Overall, Far East exports were estimated to have grown by 7.8% YoY.

Looking ahead, projections for 2024 suggest global trade see an increase in the region of 6%, with Far East exports expected to grow at a faster pace of 9%.

On the supply side, Q3 2024 data reveals an expanding gap between fleet capacity and scheduled capacity. Fleet capacity, which refers to the total available capacity shipping lines have at their disposal, is growing significantly faster than the scheduled capacity they are offering on routes. In Q3, this gap has widened to 17 points, driven largely by rerouting via the Cape of Good Hope and the introduction of more direct services. Looking ahead, MSC has expressed an intention to focus more on direct connections, in contrast to the hub-and-spoke model that will be offered by Gemini.

With demand growing faster than scheduled capacity, utilisation levels have been on the rise. For the Far East to Northern Europe and the Mediterranean routes, utilisation levels in Q2 2024 reached 80%, a notable increase of 2.7 points compared to Q1, 2 points higher than Q2 2023, and 6.5 points above Q2 2019 level.

As anticipated in our previous analysis, Q2 2024 marks the point where unit revenues began to exceed unit costs. The revenue-to-cost ratio increased by 10 points compared to Q1, 6 points compared to Q2 2023, and 7.5 points over Q2 2019. The overall industry sentiment is that peak season has passed, but rates are not collapsing – unit revenue is expected to remain above unit cost.

Despite rising freight rates, the concentration level in the deepsea market remained stable quarter-on-quarter, showing only a slight 0.5-point decrease compared to 2019. This suggests that the end of the Consortia Block Exemption Regulation (CBER) has not led to significant changes in market competition. The forthcoming slot agreements between MSC and the Premium Alliance could introduce more complexity and opacity to the industry, particularly on European routes – i.e., it will become more difficult to assess the level of concentration due to lack of data.

Shanghai retains its status as the world’s best-connected container port, with its Liner Shipping Connectivity Index (LSCI) improving across year-on-year, quarter-on-quarter, and pre-pandemic comparisons. Growth was particularly driven by an increase in scheduled capacity and the number of services.

The Maritime Trade Connectivity Index (MTCI), which factors in trade flows, shows that Q2 2024 saw no major YoY improvement, with only a 0.2-point gain, while comparing Q2 2024 with Q1 2024 and Q2 2019 we observe a contraction (not significant, but the trend is on the downward trajectory).

Port call reliability (that is ratio between calls made divided by calls scheduled to be made) has been slipping, with a slight decline in Q2 2024 compared to Q1, and more significant reductions when compared to Q2 2023 and Q2 2019. This decline suggests that, despite the level of rerouting becoming more stable, shipping lines continue to struggle with meeting scheduled calls.

On the environmental front, longer journey times have led to increased CO2 emissions per TEU. In Q2 2024, emissions were 6.4% higher than in Q2 2019; a concerning upward trend in the industry’s carbon footprint as supply chains become more complex and rerouting persists.

Conclusion

The global shipping industry is experiencing significant changes in both demand and supply dynamics. While global volumes and profitability are on the rise, challenges remain, particularly around capacity management, port call reliability, and environmental sustainability. As the market evolves and new agreements reshape the level of competition, during 2025 it will be interesting to monitor the quality of service offered by the shipping lines – both in terms of connectivity as well as in terms or reliability.

Fleet capacity is expected to increase by 1.7 million TEU by February next year, from a global total of around 29.9 million TEU to close to 31.6 million TEU. The largest contributor to the 1.7 million TEU is MSC – their share of the orderbook accounting for 24%. Second largest shipping line CMA-CGM (with 10%), followed by Maersk, COSCO and Evergreen (all with 8%). However, when we aggregate the capacity by alliance, Ocean Alliance emerges as the largest player with a global share of 29%.

Nobody knows when the Red Sea crisis will end; Gemini, Premier Alliance and MSC are all presenting two network options, via Suez Canal and the Cape of Good Hope. As the latter is now the ‘new normal’, the new capacity is expected to be absorbed by the re-routing. The ‘big question’ remaining is What shipping lines are going to do with all those new ships when the Red Sea crisis ends?

While the Red Sea crisis persists, we have seen various announcements by the alliances regarding their networks from 2025. MDST and Lloyd’s List have looked at the Asia-Europe trade and highlighted the changes for European ports, with some increasing their call quota, while others will see less calls (Lloyd's List article).

From February next year, nine of the 10 largest lines will realign alliances once more on the east-west trades. Ocean Alliance (CMA CGM, Cosco and Evergreen) will remain, the former The Alliance members — Ocean Network Express, HMM and Yang Ming — will continue as the Premier Alliance, minus Hapag-Lloyd, which will link up with European counterpart Maersk under the Gemini Cooperation, while Mediterranean Shipping Company, upon the dissolution of 2M, will go it alone.

The big winner in Northern Europe is Hamburg. The German port will enjoy 6 extra direct alliance calls from next year. Its regional rivals, meanwhile, Rotterdam and Antwerp will also gain 5 and 4 port calls respectively. 4 extra alliance calls are expected for Felixstowe as well.

On the Asia-Mediterranean corridor, the French port of Marseille-Fos and Spain’s Valencia come out well, adding three new alliance calls each. Damietta doubles its alliance quota with a further two calls from next year, while there are two extra alliance calls for Piraeus, Malaga, Gioia Tauro and Yarimca.

Algeciras, having gained two alliance calls, is expected to join Tanger Med as the most popular Asia-Mediterranean destinations from next year.

The Container Shipping Global Performance Report can be downloaded here.