Supply Chain Digest Says...   Summing it up, Drewry ends it with this: “Good luck with all of this, shipping executives!”     What do you say?   Click here to send us your comments       Click here to see reader feedback

The year 2025 is even more unpredictable than usual in the ocean container sector known for its perennial dynamism that makes any forecasting a real challenge.

That from a recent post from the maritime analysts at Drewry last week, in the apparent return of the popular Container Insights blog, which went stagnant for a period of several months.

The source of this uncertainty for 2025? It comes from two main factors: continued questions and risks relative to the so-called Houthi rebels in southern Yemen and their rocket attacks on commercial shipping in the Red Sea; and second a lack of clarity in the impact on world trade from the Trump administration.
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With regard to the Houthis, Drewry notes that following the recent start of a ceasefire deal between Israel and Hamas in Gaza on January 19, the Houthis swiftly issued a statement saying they will stop attacks on all non-Israeli-linked commercial shipping. The targeting of Israeli shipping will cease "upon the full implementation of all phases of the (ceasefire) agreement," said the Houthis via email.

However, in that same email, the Houthis warned that the attacks, or “sanctions” as they call them, would resume if any aggression occurred against the Republic of Yemen by the United States of America, the United Kingdom or the usurping Israeli entity.”

Drewry notes that since the Houthis started their campaign of terror on commercial shipping in November 2023, more than 100 container and bulk/oil ships have been attacked, two ship have been sunk, four crew member killed and the 25 seamen of the car carrier Galaxy Leader taken hostage.

The impact on shipping has been huge. Sailings through the Suez Canal have plummeted as the majority of shipping lines opted to re-route around the Cape of Good in Southern Africa Hope rather than pay the Houthis for safe passage or arrange Naval escort from a supporting government. (See graphic below,)

Container Ships Transits of Suez Canal, Nominal TEI Capacity

However, Drewry does not expect a rapid reversion to previous pre-Houthi routes.

The Gaza agreement is tenuous, and the Houthi’s can’t be trusted, Drewry observes, and carriers will err on the side of caution.

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Then there is this: Drewry states that “There is also the fact that carriers have done rather well during the diversions. Re-routing has sopped up a lot of capacity – Drewry estimates that it has reduced effective capacity by around 9% - which has helped carriers once again post some very strong quarterly profits in the past 12 months. The relationship between the diversions and carrier fortunes is well understood. Liner stock prices have taken hits whenever Gaza ceasefire talks have looked promising and already some major carriers are seeing downgrades from ratings agencies on the latest development.”

Drewry also notes that the situation has largely hidden for now the rampant overcapacity in ocean shipping capacity, with ships on-order soon to be here as well to exacerbate the situation.

Switching gears, when it comes to Trump and global trade (and hence demand for shipping) it’s all about the tariffs.

“We shall soon find out to just out radical they will be, but for now the world has no clue as to the who, how much or when,” Drewry notes, adding that “This is sub-optimal for a sector that by design craves predictability and multilateral coordination.”

Drewry then adds this zinger: In Trump’s mind, tariffs will close that gap, boost US treasury coffers as other countries will be forced to pay the higher duties – although that’s not how tariffs work – revive domestic manufacturing, add jobs, and make trading partners more acquiescent and negotiate more favorable deals for the US.”

A big problem: other than China, it is not known upon which countries Trump will unleash his tariff wrath.

Summing it up, Drewry ends it with this: “Good luck with all of this, shipping executives!”

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