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Ocean Carriers Firm on Rates While Supply Chain Leaders Face New Challenges

Ocean shipping carriers are fundamentally changing their approach to pricing and capacity management, prioritizing profitability over market share in what experts are calling a shift in "carrier DNA." This transformation, highlighted at S&P Global's TPM 2025 conference, has significant implications for global supply chains and transportation spend management.

Carrier Mentality Shift

According to reporting from SupplyChainBrain's Robert J. Bowman, container lines are undergoing a radical transformation in their basic approach to ocean shipping. For decades, carriers focused primarily on securing freight and market share for their increasingly larger vessels, often slashing rates below profitable levels to fill capacity.

Now, a "top-down boardroom mindset that 'We can make money'" is taking hold, according to Bob Fredman, principal with logistics consultancy SF Global Insights, LLC. This represents a sea change in how carriers approach their business, with greater emphasis on yield management and cost containment.

Stephanie Loomis, an ocean product and logistics professional quoted in the original report, notes that carriers are exercising much stricter oversight of non-vessel operating common carriers (NVOs) and forcing them to tender a certain portion of their freight under higher spot rates.

"It used to be not uncommon to see an importer who moved 1,000 TEUs capture a named-account rate close to what a large BCO would be paying," Loomis stated. "Those days are gone — absolutely gone."

What This Means for Shippers

For global shippers, this shift introduces new challenges in transportation spend management. Carriers' newfound focus on profitability means:

  • Stricter enforcement of space allocations under annual service contracts
  • Higher rates for smaller shippers who previously enjoyed preferential pricing
  • Increased use of "blank sailings" when loads don't offer sufficient financial return
  • Potential service cuts to marginally profitable ports

Mediterranean Shipping Company CEO Søren Toft indicated that "all margin ports will have to be relooked at," especially if President Trump makes good on his threat to impose heavy fees on Chinese-built vessels calling at U.S. ports. "We can't proceed to Oakland if it costs another $1 million," Toft said.

Market Challenges Ahead

Despite carriers' determination to maintain profitability, market forces may undermine these efforts. Heather Hwang, director at LX Pantos, predicted that 2025 will see "downward pressure" on freight rates as new ships continue to enter service. The container shipping industry faces baseline supply growth of 4.7% this year.

"Supply is growing three to four times faster than demand," noted Parash Jain, global head of transport and logistics at HSBC, suggesting that hopes for stability in 2025 may be premature after the volatility of 2024.

Managing Transportation Spend in Uncertain Times

With this backdrop of changing carrier strategies and market volatility, transportation spend management becomes even more critical for global shippers.

"The transportation industry is facing unprecedented challenges that demand sophisticated data analytics and spend management solutions," says Blake Tablak, CEO of Trax Technologies. "When carriers are focused on yield management and profitability, shippers need complete visibility into their transportation data to make informed decisions."

This evolving landscape underscores the importance of solutions like Trax's Global Freight Audit, which audits 100% of invoices across all countries, modalities, and currencies, then normalizes that data to enable effective Spend & Compliance Management.

Particularly valuable in today's environment are tools that help shippers:

  1. Track rate accuracy across all carrier contracts and spot quotes
  2. Identify and eliminate unnecessary charges through comprehensive freight auditing
  3. Gain visibility into blank sailings and service disruptions that affect the supply chain
  4. Measure carrier performance to ensure service levels match contracted rates

Looking Forward

As carriers attempt to alter their "DNA" and market dynamics continue to shift, the coming year promises significant challenges for global supply chains. By leveraging comprehensive transportation spend management solutions, shippers can navigate these turbulent waters with greater confidence and control.

This article is based on reporting by Robert J. Bowman, SupplyChainBrain. The original article "Ocean Carriers Get Tough on Freight Rates — But Can They Hold the Line?" was published March 10, 2025.

Trax is the global leader in Transportation Spend Management solutions. We empower organizations with globally complex supply chains to gain greater control and visibility, driving enterprise-wide efficiency, maturity, and value. Learn more at traxtech.com.