Shipping outlook stable, but container oversupply looms

THE OUTLOOK for global container shipping in 2025 was revised from ‘deteriorating’ to ‘stable’ by Fitch Ratings following steady to improving performance across several sub-sectors, such as tankers and bulk shipping. This cautiously optimistic assessment, however, is balanced by ongoing challenges in the container shipping segment, where oversupply and downward pressure on freight rates are likely to persist.

The global shipping industry remains one of the sectors most exposed to geopolitical conflicts. With several key trade routes passing through strategic chokepoints, shipping faces heightened vulnerability to disruptions, Fitch ratings revealed. Tanker shipping benefited from increased demand linked to the Ukraine war, while container shipping faced setbacks stemming from disruptions in the Red Sea. While a reduction in geopolitical risks could stabilise freight rates, the normalisation process is expected to be slow, even in the event of dispute resolution.

Adding to the uncertainty are trade policy shifts, particularly considering the recent US elections. These changes could potentially weaken demand for shipping services in 2025. However, the continued adoption of ‘just-in-case’ inventory strategies by global businesses may provide a temporary boost in demand, as companies prioritise supply chain resilience over efficiency. Additionally, the rerouting of trade lanes to navigate new policy landscapes could help mitigate some of the anticipated demand risks.

The performance of specific shipping sub-sectors reveals a mixed picture for this year. Tanker and dry bulk shipping are forecast to remain stable, with tankers expected to perform particularly well due to steady demand and limited fleet expansion. By contrast, the container shipping segment may face significant challenges as a surge of new vessel deliveries scheduled for 2025 is expected to exacerbate oversupply in the market, further driving down freight rates.

At the same time, the industry’s focus on sustainability continues to intensify as regulatory pressures surrounding emissions grow. The implementation of stricter environmental standards poses medium- to long-term challenges, requiring significant investments in greener technologies, operating assets, and supporting infrastructure.

Overall, the global shipping outlook for 2025 suggests a period of stability, albeit one marked by conflicting fortunes across its sub-sectors. While tankers and dry bulk shipping appear well-positioned for steady performance, the container segment must grapple with structural challenges that could weigh on profitability.