Introduction

The year 2025 commenced amid notable volatility in the maritime shipping industry, particularly impacting on dry bulk and large vessels. Influenced significantly by geopolitical uncertainty, tariffs implemented by Trump, and the subsequent macroeconomic implications, this report analyzes the development of ship freight rates, performance of bulk carriers, port congestion in the U.S., and their implications on the financial performance of shipping companies through Q1 and Q2 of 2025.

Ocean Freight Market

Global container trade rose by 11.2% in January, but both Linerlytica and Drewry have revised their outlooks, now forecasting a 1.1% decline in global container throughput for the full year. MSC became the first carrier to operate a fleet of 900 vessels, with a total capacity of 6.47 million TEU and an additional 132 vessels on order. Meanwhile, 16% of global container shipping capacity is currently tied up due to vessels rerouting around the Cape of Good Hope or facing port congestion and delays.

Ship Freight Prices and Market Dynamics

At the outset of 2025, dry bulk ship freight rates reflected cautious optimism, driven by moderate global economic recovery post-COVID. However, underlying instability emerged with geopolitical tensions, particularly around trade policy. The announcement of tariffs under Trump's presidency introduced immediate uncertainty into the shipping markets.

Initially, the reaction in freight rates was muted due to strong global growth factors and an anticipation that tariffs might be short-lived. The Baltic Dry Index (BDI), a critical benchmark for global freight rates, began 2025 at moderate levels but soon encountered fluctuations as tariff uncertainty took hold.

The Impact of Trump’s Tariffs and Baltic Dry Index Trends

Trump's tariff announcement created a ripple effect throughout maritime markets. Initially, tariffs targeted imports from China, significantly affecting bulk commodity flows. The Baltic Dry Index, sensitive to global economic shifts, initially appeared resilient in the first quarter of 2025, supported by ongoing strong global demand. Yet, entering the second quarter, the index began to show signs of weakness. Sustained tariffs threatened to weaken Chinese demand for critical dry bulk commodities such as coal, iron ore, and grains, severely impacting freight rates.

The BDI’s early resilience gradually faded, reflecting a broader concern over potential long-term tariffs. By mid-year, despite occasional rebounds due to seasonal factors and specific infrastructure projects like Guinea’s Simandou iron ore project, the index maintained overall weakness, signaling continued underlying challenges in dry bulk shipping markets.

Bulk Carriers: Capacity and Orders

Bulk carriers faced dual pressures in 2025: subdued freight rates and operational costs escalating amid market uncertainty. Vessel owners, particularly those operating larger Capesize and Panamax ships, faced significant cash flow challenges. Daily operating expenses combined with debt obligations were increasingly hard to cover as freight rates declined.

The dry bulk fleet’s age profile provided some relief, as older vessels nearing retirement reduced the risk of oversupply. New shipbuilding orders remained limited at approximately 10% of the global fleet, influenced by industry caution, low profitability, and stricter environmental regulations. The resultant fleet dynamics somewhat mitigated the downward pressure on rates by preventing excessive supply growth.

U.S. Port Congestion and Its Effect

Concurrent with tariffs, U.S. port congestion significantly influenced operational efficiency and shipping costs. Ports along both East and West coasts experienced logistical bottlenecks exacerbated by disrupted supply chains and fluctuating import volumes. Congestion was initially driven by anticipatory stocking by retailers in Q1, aiming to avoid tariffs, but subsequently eased slightly as tariff impacts became clearer.

The port congestion intensified operational costs, particularly demurrage and detention fees. Delays also compelled shippers to adjust scheduling and increase lead times, indirectly inflating operational overheads. This added pressure on already fragile margins in the dry bulk shipping sector.

Financial Performance: Q1 vs. Q2

In the first quarter of 2025, shipping companies faced a challenging environment marked by economic uncertainty and the implementation of new tariffs. Despite some companies reporting strong earnings, the overall industry experienced a decline in revenue and profitability. For instance, Schneider National reported a Q1 2025 revenue of $136.7 million, down from $160.9 million in Q1 2024, resulting in a net loss of $8.1 million compared to a profit of $281 million the previous year. Similarly, J.B. Hunt saw its revenue decrease to $219 million in Q1 2025 from $270 million in Q1 2024, with a net loss of $13.8 million.

The second quarter presented even more significant challenges. The imposition of steep tariffs, such as the 145% rate on Chinese imports, led to a substantial decline in shipping volumes. Maersk reported a 30% to 40% drop in container volumes between the U.S. and China in April 2025, attributing the decline to rapid customer reactions, including cancellations and order delays. Hapag-Lloyd also noted that 30% of U.S. orders from China were canceled due to the disruption caused by these tariffs.

These developments underscore the profound impact of tariff policies on the shipping industry, leading to decreased revenues and heightened operational challenges in both Q1 and Q2 of 2025.

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Blank Sailings: A Strategic Response

One key tactic deployed by ocean carriers to manage falling demand and volatile trade patterns was the increase in blank sailings—the cancellation of scheduled voyages or skipping of ports. This measure helped shipping lines adjust capacity and prevent rate collapses.

The surge in blank sailings was primarily caused by:

• Front-loading of shipments before tariffs took effect, distorting normal demand patterns.

• Overcapacity, as demand plummeted after Q1.

• Port congestion, which introduced inefficiencies and forced operators to consolidate routes.

While blank sailings helped stabilize freight rates temporarily, they created further supply chain unpredictability and affected reliability for shippers.

Coping Strategies Amid Freight Turbulence

In response to these systemic pressures, businesses and logistics providers have adopted several mitigation strategies:

• Diversification of Sourcing: Many firms reduced reliance on Chinese suppliers by shifting to Southeast Asia, including Vietnam, Indonesia, and Thailand.

• Inventory Rebalancing: Some transitioned from just-in-time (JIT) to just-in-case (JIC) inventory models to guard against shipping delays.

• Technology Investment: Enhanced tracking, AI-powered scheduling, and predictive analytics are being used to better anticipate disruptions.

• Carrier Partnerships: Closer collaboration with logistics providers helps secure space on more reliable sailings and navigate shifting schedules.

These responses aim to improve resilience in a shipping environment marked by volatility and geopolitical friction.

Conclusion

The first half of 2025 revealed the fragility of global shipping under the pressure of politicized trade policies. Trump’s tariffs triggered a cascade of disruptions—from freight rate instability and declining BDI performance, to blank sailings and financial losses for major carriers. While dry bulk demand showed pockets of resilience, the outlook remains uncertain.

Port congestion, shifting demand, and cancelled sailings exposed systemic weaknesses in maritime infrastructure and planning. Moving forward, companies across the supply chain must invest in agility, diversification, and digital tools to survive—and eventually thrive—in the turbulent seas of global trade.

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