This commentary discusses our 2025 outlook for the global container terminal operators industry. Key highlights include the following:
— There was robust normalized growth in container volumes driven by consumer demand in 2024, despite geopolitical challenges.
— Reorganization of shipping alliances this year could affect ports differentially. Transshipment hubs and smaller ports may be more affected with changes in the shipping companies’ route strategies.
— Trade tariffs expected to be imposed by the U.S. are likely to dampen overall volumes and favour exporting ports outside of China.
— Geopolitical risks continue to affect smaller ports on key trade routes, and labour issues are causing volume shifts between the U.S. coasts.
“Credit ratings in the sector remain stable and supported by fundamental factors such as the strength of the service areas, competitive positioning of terminals, long-term concession agreements, and demand for essential goods,” said Suneil Ramesh, Vice President, Asset Finance, European Corporate Ratings.
We expect global container volume growth to be dampened by the trade tariffs the U.S. is expected to impose in the coming months, as well as by increased geopolitical risks in the Middle East and Asia. While we expect the reorganization of major shipping alliances to provide better scheduling and reliability for shippers, it could also cause a differential impact on certain ports based on shipping lines’ routing strategies. We expect importing ports with strong hinterland demand and critical exporting ports to be resilient, while we expect ports dependent on transshipment volumes and near geopolitically sensitive areas to be more susceptible.
Credit ratings in the sector remain supported by fundamental factors such as the strength of the service areas, competitive positioning of terminals, long-term concession agreements, and demand for essential goods.
Robust Normalized Growth Driven by Consumer Demand
In 2023, container volumes in major North American ports were at their lowest levels since the onset of the COVID-19 pandemic. In 2024, container terminal volumes showed strong growth despite geopolitical challenges. Unlike the growth during the pandemic, we consider this growth to be driven by long-term fundamentals. Global container terminal volumes in the first 11 months of 2024 were 5.3% higher as compared with the corresponding period in the previous year, as reported by Container Statistics.
Imports into North America and Europe from Asia were robust, driven by increasing demand for consumer goods.
Mexico is also becoming more important in the supply chain given the trend in nearshoring and its proximity to the United States. Goods from the Port of Lázaro Cárdenas and the Port of Manzanillo, key ports on Mexico’s western coast, get transported to the U.S. West Coast via sea.
Shipping Alliance Reorganization Expected to Affect Transshipment-Focused and Smaller Ports
Shipping alliances are undergoing a change in 2025. The 2M Alliance, a partnership between MSC and Maersk, the two largest shipping companies, will be dissolved in 2025; Maersk will be part of the Gemini Alliance starting in February 2025, along with Hapag-Lloyd, while MSC will operate independently. The partnership known as the Alliance will be disbanded, and ONE, HMM, and Yang Ming will operate as the Premier Alliance. The Ocean Alliance’s composition remains unchanged and continues into 2032.
While the new shipping alliances are targeted to increase schedule reliability and improve efficiency, which is beneficial for shippers, it could also result in a rebalancing of volumes across alternate ports. The Gemini Alliance, for instance, will have a hub-and-spoke model where larger ports act as main transshipment hubs; we expect such ports to see an increase in volumes. Maersk has announced plans to shift its UK operations away from the Port of Felixstowe in Suffolk, a key container gateway in the UK. MSC has announced an independent East/West trade network with 34 loops across five key trade lanes starting in February 2025,offering services via the Suez Canal as well as the Cape of Good Hope and including additional ports of call.
Ports that have volumes driven by strong hinterland demand could be positively affected, with shippers expected to prioritize these ports and alternate shippers still available to replace lost volumes, if any. Ports that are transshipment hubs are more exposed to the reorganization in shipping alliances and new strategies.
Trade Tariffs Likely to Dampen Overall Volumes and Favour Exporting Ports Outside of China
The incoming Trump administration is currently proposing to levy an additional 10% tariff on Chinese goods imported into the U.S., among levies on imports from other countries, expected to be implemented soon after the inauguration on January 20, 2025. The election campaign suggests that the tariffs could potentially be higher over time, up to 10% universal tariffs and a 60% tariff on imports from China.
When trade tariffs were imposed in 2018 and 2019, our analysis indicated that the volume decline in affected items ranged between 25% and 40% toward the end of 2019, although North American container terminals overall did not report a material negative impact.
We expect the impact this time to depend on the magnitude of tariffs imposed, which could differ from those suggested during the election campaign; the breadth of categories to which tariffs are applied; and retaliatory tariffs, which we expect will follow given the trends observed during the previous Trump administration. Such tariffs could lead to a reduction in imports and/or rerouting of imports from or through other countries. The potential tariffs are also leading some importers to advance shipments before such tariffs take effect, leading to a surge in volumes, although we expect this impact to be short term in nature.
Geopolitical Risks Continue to Affect Smaller Ports on Key Trade Routes
Houthi attacks continue to negatively affect volumes in the Suez Canal and are causing ships to reroute via the Cape of Good Hope. Volumes in October 2024 were less than half the volumes in the same period the previous year.
Eastern Mediterranean ports, including the Port of Piraeus, have experienced a 33% decline in deep-sea port calls.
We still expect primary ports of call to be insulated, as we have previously noted.
Labour Issues Causing Intercontinental Volume Shifts
Labour issues have affected the sector over the last few years, particularly in North America. The International Longshoremen’s Association’s (ILA) three-day strike in October 2024 affected the United States’ East and Gulf Coasts and resulted in some shippers diverting traffic from the United States’ East and Gulf Coasts to its West Coast, which also increases congestion at the receiving terminals. The strike was partially resolved at the time with a tentative agreement involving a 62% wage increase over six years. The ILA and its employers reached another tentative agreement in January 2025 on a new six-year contract, resolving issues around automation and averting any additional work stoppage.
The new contract is expected to be finalized through a ratification vote this summer. These labour dynamics highlight the diversification benefit for terminal operators having operations in different regions and geographies.
Fundamental Factors Still Strong for the Sector
Despite the changes and developments in the industry, shipping serves both essential and important needs across the globe and has been resilient over the years. Credit ratings in the sector remain stable and supported by fundamental factors such as the strength of the service areas, competitive positioning of terminals, long-term concession agreements, and demand for essential goods.
Source: DBRS