In 2024, due to the Red Sea crisis, the shipping cost of textile exports will often double, making many textile enterprises miserable. However, with the gradual easing of the Palestinian-Israeli situation, there is a clear downward trend in shipping costs in 2025.

Freight or welcome 'price war'

Sea-intelligence, a prominent maritime consultancy, wrote that if container shipping lines can safely cross the Red Sea and Suez Canal again, it could spark a "price war."

Over the past year, the safety of shipping routes has become a major concern for global logistics, particularly around the Red Sea and Suez Canal. Attacks on commercial vessels by the Iranian-backed Houthi group have led many shipping companies to choose to bypass southern Africa, avoiding the Red Sea and Suez Canal, an important global shipping corridor. Once the situation in the Red Sea stabilizes and shipping companies reopen this route, there may be a "price race" and freight rates will show a rapid downward trend.

If the Red Sea route is reopened, container freight rates are likely to fall 60-70 per cent within six months, according to Sea-Intelligence, a shipping analyst. This change will profoundly affect the supply and demand landscape of the global shipping market and could bring similar or more severe market conditions to the end of 2023.

Analysts believe that once shipping companies resume the use of the Red Sea route, freight rates are likely to fall sharply. Due to the oversupply of market demand, the container shipping market will fall into a "price competition". In order to compete for market share, shipping companies may be willing to cut prices to attract customers. In addition, global shipping capacity has grown rapidly in recent years due to high profits.

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