Trade will continue to happen, key continues to be demand: Roeloffs

Tariffs, no tariffs, Trump or geopolitics, global trade will continue to flow despite uncertainties. All depends on demand and capacity to move goods profitably (or even at a loss), according to Christian Roeloffs, Founder and CEO, Container xChange.

While all the moves in the container shipping industry in 2025 will largely be driven by developments in the Suez Canal, other factors will also play key roles in shaping the mode that moves around 80 percent of world trade volume.

Container xChange recently made its data available free to customers in a bid to ease trade worries and make the right connections globally. Edited excerpts from an interview:

What were the key reasons for Container xChange to make data free for customers?
It's very important to stay very close to the market to understand where the market is headed. Our customers and, of course, other related industry stakeholders need to understand the expectations by businesses etc. That was the key reason for our decision to free up data.

What are the significant challenges for the container industry in 2025?
Finding the right partners and finding the right network remains the biggest challenge. I think that's even more important now... in order to be able to prepare and create resilience against market uncertainties that will for sure and for certain come this year.

Be it tariff wars, be it geopolitical uncertainties, be it inflation, be it... I don't know, a reshuffling of container shipping alliances. So there's a lot of uncertainty, and businesses have to prepare for that, and one element really is creating strong and resilient partnerships, networks.

Container logistics is inherently a global business, and what we've seen is that it can be relatively easy to find somebody who can help you with a specific inquiry - be it finding a depot, finding an agent or finding a trucker. But it's very difficult to find somebody that you actually trust. There's no structured information out there around trustworthiness.

“And all of that is very slow. It's cumbersome, it's very much dependent on individual people and hence it's not scalable. And what we've built is essentially a network that allows customers not only to find each other but also assess each other's responsibility.

Regulatory risks and shifting alliances, that's a key topic for us. Another big issue is geopolitical uncertainties. We've seen since Covid that there is significant disruption in container logistics, particularly whenever there is a maritime choke point that is somehow impacted by geopolitical events. We've seen this with Russia and Ukraine. We've seen this with the Red Sea effectively being closed to container liner shipping due to the attacks by the Houthis.

We've seen this before as well when the Evergiven got stuck in the Suez Canal. We've seen it in the Panama Canal, sort of falling water levels that restricted the number of vessels that could go through that waterway. In this case, not geopolitically induced but still a sort of significant impact.

And these kinds of disruptions, we believe, will continue to persist. We have Trump (U.S. President Donald Trump) now in office who has a lot more erratic and unpredictable style of governing. You have rising geopolitical tensions with China and even within the North American continent. Just look at Canada and Mexico. So these kinds of topics will significantly impact container shipping.

You brought up Trump and his style of working. So, how do you think tariffs and retaliatory tariffs will impact trade?
To be honest, I don't think that it will necessarily impact volumes. Yes, it will slightly impact demand in the U.S., for example if consumer prices go up. It might change some trade imbalances slightly, but overall trade, and especially global trade, is very resilient against tariffs. As long as they're not punitive. If you put a 500 percent tariff on something, yes, of course then that makes the whole trade unprofitable. But as long as it's sort of manageable, trade will persist.

For me, I don't expect volumes to be significantly impacted by tariffs. What we do expect, though, is that trade patterns and trade routes will shift. We've seen this already in the past couple of years where we saw a diversification of suppliers away from China into the remainder of southeast and northeast Asia.We've also then seen, on the import side in the U.S., for example, cargo being moved away a little bit from North American ports into, for example, Mexican ports for final assembly. And then transport across the Mexico-U.S. borders. So, these kinds of shifts in trade patterns happen because of tariffs, but overall, the volume of trade will not be significantly impacted.

So, what does this mean for us? Our customers are container traders, leasing companies, NVOCs and container shipping lines. For us, this really means no significant impact on the demand side, but, hey you have to find new partners, because suddenly your geopolitical setup changes. You cannot do with, for example, your partners in China. You suddenly also have to find partners in Vietnam or Korea or Taiwan to work with. And that's something where, again, you have to build trustworthy, trusted relationships where we again, with our network solution, now try to help and support the industry.

The USTR proposal to apply port call fees of up to $1.5 million on Chinese carriers, vessels and carriers with Chinese vessels in their fleet is the latest development that could disrupt ocean logistics. If implemented, carriers paying fees for each U.S. port call will likely pass on costs to shippers. What is your take on the developments?
This move will create ripple effects across the entire shipping industry. The reality is, nearly every major shipping company operates Chinese-built vessels; so these fees won’t just impact a few - it’s a widespread issue that will increase costs for importers, exporters, and ultimately, consumers.

"At a time when supply chains are already stretched and businesses are trying to stay competitive, adding more cost pressures will only create more instability. We may see carriers re-routing ships to avoid fees but that comes with trade-offs—longer transit times, delays and price increases. What the industry needs right now is stability, transparency, and efficiency - not more disruptions."

"This is why trusted networks and data-driven decision-making are more critical than ever. Companies need to know who they can rely on, where alternative opportunities exist and how to mitigate risks in a rapidly changing market. At Container xChange, we’re helping businesses tackle this uncertainty by providing verified networks and real-time market insights to make smarter container logistics decisions."

China plus X is the new strategy rather than plus one. So, how do you think demand and supply is going to catch up?
I think what many people sort of get wrong a little bit is that they think that China plus one or China plus X is something that somebody decides, and then it happens and it's a reality. And that's the new normal. But in reality, these shifts happen very gradually and slowly.

It's almost like tectonic plates sort of shifting. Right? Because it might be easy to say, okay, I'm not going to buy from this supplier, I'm going to buy from that supplier. You have to build up a sort of a trusted relationship first. But oftentimes, there are no suppliers available that fit your requirements, your needs in a different country. Because they don't have the manufacturing set up there, they don't have their supplier network there, et cetera, et cetera. So, in order to build that up, a lot of basework is needed in the countries that are on the receiving end of the China plus X shift.

This takes a couple of years to be fully implemented, and we've seen the start. Yes. Okay, let's say five years ago, maybe at the beginning of Covid. That's when the world woke up a little bit, said, okay, we're very dependent on China. We have to diversify our supply chain a little bit, we have to move towards a China plus one or China plus X strategy.

But I don't think that this movement is already final and finished. So we will continue to see a diversification of trade lines. And with that sort of diversification again of partner networks, supplier networks have to build trustworthy relationships again with multiple partners.

So, do you see any major shifts in trade lanes in 2025?
I think the China-U.S. trade lane, the big transpacific east west trade lane, I don't think will be impacted significantly by tariffs. What I do think, though, is that we'll see a significant change in freight rates, especially on the transpacific side because of overcapacity in the market. And that's both over capacity for container vessels as well as for containers.

Why do we believe that? Well, the main reason why the market is still somewhat in balance is the blockage of the Suez Canal due to the attacks by the Houthis. If that choke point opens up, we'll have an influx of between eight and 10 percent of extra capacity into the market, and that capacity will be deployed and container lines will want to fill that capacity and hence we'll see reduced rates.

There will be almost like a rate war again for market share. The new setup might actually support that a little bit because there's new alliances, they still have to find their footing, but once they do, they have to fill their capacity. They have to fill their vessels.

That, I think, will be the main defining factor of these trade lanes, and the freight rates in 2025. Which actually was also confirmed by Maersk two weeks ago in their earnings call where they said the profitability forecast for 2025 is highly uncertain. It can be between zero and $3 billion, depending on when and whether the Suez canal will open up.

All the new alliances have been talking about improving reliability. That is their main challenge. Do you think 2025 will give us an indication of this happening? Or do you think this will take longer?
I think we'll see what sort of model works in 2025. I think the Gemini alliance is sort of operating a hub and spoke model with major transshipment ports, and the claim was this will improve reliability because we have very frequent sort of mainliner services between major transshipment ports, but we now already have sort of reports and discussions in the market that this is actually not happening. If you miss your connection, you'll have to wait for the next one, and that brings down your schedule reliability.

If a vessel is missed, capacity is building up for the next vessel, and maybe then that's too much capacity. So, the next vessel will also not be able to fulfill all of that demand and all of that cargo, and then you'll have sort of ripple effects throughout the network.

Whether the other networks do a better job at managing this remains to be seen but we'll see which model will produce the highest schedule reliability in 2025.

So, in all this background, where do you see the container prices settling down in 2025? They have seen huge volatility in 2024 because of various reasons. What do you foresee in 2025?
We've seen a significant increase in container prices in 2024. Across the board. China has sort of spiked towards the end of the second half of last year, and has then sort of tapered it off a little bit.

This Chinese New Year was sort of a little bit of a watershed. So the question is now, how will container prices move forward this year?

Here again the question around the reopening of the Suez Canal will play a major role. If there's a reopening, there will be a lot of extra capacity being unleashed. Once released into the market, it will ultimately push down prices

There's going to be a significant supply overhang versus existing demand. We already see that when talking to customers. Most of the conversations at the recently concluded Break Bulk Exhibition in Dubai trade show focused on how container prices are going to develop in 2025. And most of the people I talked to are preparing for a downturn. They say, okay, a little bit more careful when buying secondhand containers. Maybe I reduce my second hand container fleet a little bit and wait for prices to come down to replenish the fleet..that's the sort of the talk of town at the moment, and everybody's preparing for the winter to come.

Container shipping lines reported bumper profits in 2024. So, what are your expectations for 2025? What are you hearing in the market about the operations?
I think it all depends on the Suez Canal. It all depends on sort of what happens in Israel and Gaza. It all depends on what the Houthis are making of this.

So, we do believe that there will be a correction this year in 2025 but how big of a correction this will be remains to be seen. Again, referring to the Maersk earnings call two weeks ago, it's a very broad range. It can be anything between zero and $3billion... significant profitability or barely breaking even. And if the Suez Canal opens up, there will be significant overcapacity and enhanced price war, sort of, that follows. If that happens, I think breaking even for the industry will be a significant challenge, and we'll see losses across the board.

I don't have my crystal ball here with me, unfortunately, but definitely it's going to be a correction that is coming this year. Just how much of a correction remains to be seen.