How Chinese New Year Could Disrupt the Transportation Industry

The end of January marks a pivotal moment in transportation. With Chinese New Year and the start of the new US administration, potential disruptions are anticipated. While Chinese New Year typically brings some void sailings and a temporary dip in volumes, world’s largest container shipping companies are slashing tariffs to fight for market share. The real impact? Expect limited vessel availability for exports 6-8 weeks later, especially in Europe, with delays expected around late March and early April due to longer routes via the Cape.

Chinese New Year also triggers the launch of revamped shipping alliances. The usual slowdown in volumes is a perfect opportunity for carriers to shuffle vessels, adjust schedules, and reset international shipping services. This realignment could cause short-term volatility in transit times and routing as carriers fine-tune their operations, meaning that the positive effects will take time to materialise.

And then there’s the Suez. For now, shipping lines continue to favour the Cape route due to ongoing instability in the Red Sea, which means longer transit times. However, all alliances should have prepared alternative schedules via the Suez for when the situation improves. If that happens, shippers should expect a double-edged impact: faster transit times but intense competition for volume, potentially pushing freight rates lower. Once the shift happens, they can expect 3-4 months of chaos as schedules and port rotations are reworked.

Meanwhile, the ongoing trade tensions between China and the US adds a whole new layer of complexity. With the new US administration, reduced trade volumes may influence both pricing and capacity, especially as the US imposes new restrictions on China’s state shipping company, which could ripple through the Ocean carriers and impact Europe as well.

With disruptions likely to continue in 2025, shippers should adopt a more proactive approach to adapt to changing market conditions and route adjustments. For example, implementing flexible operational tactics can help manage rate volatility and secure capacity. Through adaptable strategic planning and pricing mechanisms, shippers can mitigate risks and maintain stability in an unpredictable market.