OCEAN CONTAINER RATES SLIDE AS US TARIFFS SHADOW LOGISTICS PLANNING
The initial announcement of 25% tariffs on all U.S. imports from Mexico and Canada sent shockwaves through the logistics industry. However, within days, the administration issued a one-month reprieve for automotive goods covered by the United States-Mexico-Canada Agreement, later extending this suspension to all imports under the agreement. This impacts an estimated 50% of imports from Canada and 38% from Mexico, including automotive goods, food and agricultural products, and many appliances and electronics. Similarly, ocean prices on the Asia-Europe trade have dipped below last year’s low in recent weeks. Asia-North Europe rates increased 3% to $3,064 per FEU. Asia-Mediterranean prices stayed level at $4,159 per FEU. While general rate increases at the start of March slowed the decline, pushing rates up by a couple hundred dollars, this increase fell well short of the $1,000 hike carriers had announced. Asia Mediterranean prices have stabilized and are roughly on par with rates from a year ago.
CONTAINER IMPORTS HEADED FOR SUMMER DOLDRUMS, SAYS NRF
Imports at major U.S. container ports are expected to remain high through spring but could see year-over-year declines this summer, according to the latest Global Port Tracker report from the National Retail Federation and Hackett Associates. The ongoing tariff situation continues to impact import volumes and strategies. “Retailers are continuing to bring as much merchandise into the country ahead of rising tariffs as possible,” said Jonathan Gold, NRF vice president for supply chain and customs policy, in a release. Hackett predicted that such a fee could alter shipping patterns, with carriers likely to use larger vessels and consolidate calls at major ports rather than make multiple stops at smaller ports. While ports managed the surge in import volume during the final quarter of 2024 without major issues, these potential changes could put additional pressure on the supply chain at the largest American gateways and negatively impact smaller hubs.
AMID OCEAN CONTAINER LINER GAINS, ZIM EARNINGS SHINE
Zim Integrated Shipping Services Ltd. results saw a significant turnaround as strategic operational expansions and increased market penetration yielded substantial gains in 2024.The world’s 10th-largest carrier said full-year revenues soared to $8.43 billion, up 63% year over year as net income of $2.15 billion improved a loss of $2.69 billion in 2023. Adjusted earnings before interest, taxes, depreciation and amortization reached $3.69 billion, up 252% y/y. Fourth quarter revenues climbed to $2.17 billion, an 80% increase from the same period in 2023. Net income stood at $563 million, from a loss of $147 million. For 2025, Zim projects an adjusted EBITDA between $1.6 billion and $2.2 billion, with adjusted earnings before interest and taxes expected to range from $350 million to $950 million. These projections reflect the company’s confidence in sustaining its positive momentum, but the carrier in a release said it remains vigilant about geopolitical tensions and uncertain economic policies affecting global trade dynamics. The company declared a Q4 2024 dividend of $382 million, contributing to a total dividend payout of $961 million for the year, or approximately 45% of net income.
TRITON ACQUIRING GLOBAL CONTAINER INTERNATIONAL
Headquartered in Bermuda, container leasing giant Triton is acquiring Global Container International (GCI) in a deal valued at more than $1 billion, including outstanding debt. The transaction is expected to close in the first half of 2025, subject to customary closing conditions including regulatory approval. Boston- based Global Container International was established in 2018 by industry executives in partnership with funds managed by Wafra Inc. fleet of around 500,000 teu under long-term lease to container lines globally. Following the transaction Triton’s fleet of containers will increase to 7.5 milion teu.“The GCI team has created an impressive business with a well-structured long-term lease portfolio. This acquisition is an excellent strategic fit for Triton that will allow us to lock in meaningful container fleet growth,” said Brian Sondey, CEO of Triton. Jeffrey Gannon, CEO of GCI, and Adrian Dunner, COO, shared, “As we end this exciting chapter, we want to say how deeply thankful we are to our customers, vendor partners, and dedicated employees, all of whom have played a critical role in our long-term success.”