Long Beach, California — The container shipping market is poised to recede this year, and the downcycle could be more severe than prior bear markets, industry experts at the Journal of Commerce’s TPM25 conference said Monday.

A container market downcycle is already “well underway,” said Parash Jain, global head of Transport and Logistics Research at HSBC. “This downturn could be worse than past downturns,” said Jain, speaking during a panel session on the container shipping outlook for 2025.

Jain pointed to several factors that could provide fuel for the downcycle, including uneven demand growth globally, a worsening supply-demand imbalance, a hefty order book that is poised to exacerbate an already significant oversupply issue and increased carrier war chests that could prolong price wars.

According to Jain, global nominal fleet growth at 33% far outpaced container trade volume growth of 9% in 2024, although disruptions absorbed much of that extra capacity. If those disruptions recede, oversupply will likely return and drag rates lower, he said.

In addition to overcapacity, uneven demand growth globally poses a growing hurdle for the industry. While volumes on the Asia-to-North America trade grew 28% from 2019 to 2024, the North America-Asia lane shrunk 15% and the Europe-Asia trade declined 23% during that same time, Jain said. Unbalanced demand growth worsens the supply-demand imbalance and exacerbates equipment availability hurdles, he said.

At the same time, shrinking consumer demand and increasingly aggressive tariffs pose a potential hurdle for the industry this year, according to Chris Rogers, head of supply chain research at S&P Global Market Intelligence.

“That’s likely to prove inflationary, which could start to hit consumer spending in a way maybe we didn’t see last time around,” Rogers said. S&P Global is the parent company of the Journal of Commerce.

Meanwhile, a US proposal to tax Chinese tonnage and port calls could introduce further uncertainty, said Jain, which is “sufficient enough to create chaos come April.” Still, the proposal’s viability has been met with significant skepticism.

The shipping industry is in a “new area of volatility,” said Heather Hwang, head of the sea pricing strategy department at logistics provider LX Pantos.

Spot ocean rates in the eastbound trans-Pacific have fallen more than 53% to the US West Coast this year, according to Platts, a sister company of the Journal of Commerce within S&P Global.

Laura Robb, Associate Editor | Mar 3, 2025, 5:04 PM EST