News / Geopolitics driving a search for new markets as demand softens

ID 225820709 © Andrii Yalanskyi

Stakeholders should expect softening in demand volumes for the remainder of the year, but the geopolitical environment has encouraged the exploration of new markets. 

“We’ve had an incredible three months… the third month in a row of volumes of more than 16m transported teu. July was 16.57m teu, that was 5% up on this time last year,” Nigel Pusey, CEO of Container Trade Statistics (CTS) told The Loadstar Podcast. 

“We’re at 110m teu for the first seven months of the year, and that’s up 4.5% year on year. It’s particularly unusual and it’s quite a fascinating period of global growth in container shipping,” he said. 

However, Mr Pusey highlighted that these figures reflected bookings taken in July for shipments taking place at the end of July or early August – coinciding with the 1 August deadline given for reciprocal tariffs in the US.  

“So without being too speculative, I think we can be fairly sure that our August liftings are going to be below 16.5m,” he said. 

 “I think we are starting to see it.” 

He underscored the uncertainty in making predictions, highlighting the surprising 4.5% demand increase registered by CTS in July volumes, and added that although there would be “some softening”, it was likely that would not be at the level originally thought for this year. 

 “We’ve had the network changes, we’ve had the tariffs, etc. I think all of that has probably forced a few liftings into the first half of the year. So, I think the second half will be a little bit softer,” he explained. 

Amid a heightening trade war, Mr Pusey explained that the geopolitical changes had encouraged stakeholders to find new markets, rather than reduce trading.  

“Interestingly we’re getting global growth. We’re seeing the US offsetting imports from greater China to South-east Asia, but greater China finding other places to source its cargo distribution. 

“Individual shippers are saying, ‘well I’m not going to ship to America, but I found a great market elsewhere’.” 

For example, according to CTS data, China to Argentina volumes are up 99% year to date, with 80% of this growth going to Buenos Aires. Overall, Far East to South & Central America year-to-date was up 14%. 

Additionally, China to West Africa volumes in July were up some 72%, to reach 177,178 teu versus 102,581 teu in July 2024. 

“You’ve got some very interesting geopolitical changes where people are moving cargo to places they hadn’t thought of before,” Mr Pusey concluded.