Declining Container Shipping Rates Amid Policy Uncertainty

The Drewry World Container Index reported a 1% decline in global container shipping rates, bringing the cost to $1,899 per 40-foot container. This marks the seventh consecutive week of falling rates, a trend that diverges from the typical pre-Lunar New Year surge in cargo demand. The decline is particularly pronounced on Asia-Europe routes, with rates from Shanghai to Rotterdam decreasing to $2,094 and Shanghai to Genoa dropping to $2,826. Transpacific routes also experienced pressure, with rates from Shanghai to Los Angeles falling to $2,191, while rates to New York remained stable at $2,771.

Container Spot Rates Extend Losing Streak Despite Factory Reopenings

The ongoing decline in shipping rates is attributed to several factors, including a lack of the expected cargo surge and new U.S. tariff policies that have introduced uncertainty into trade lanes. Following a recent U.S. Supreme Court ruling that struck down extensive tariffs, President Donald Trump announced a new 10% global tariff under Section 122 of the Trade Act of 1974. This tariff is set to last for 150 days, but confusion remains regarding its potential increase to 15%. Analysts from Moody’s Ratings indicated that the administration's efforts to maintain tariffs could lead to increased costs for goods.

Container Spot Rates Extend Losing Streak Despite Factory Reopenings

The container shipping industry is facing a potential oversupply crisis, with the order book exceeding normal replacement requirements. Linerlytica reported that the order book has ballooned to over one-third of the existing fleet, following a record-setting order spree in 2025. As carriers plan 63 blank sailings for February—up from 27 in January—this capacity management strategy aims to mitigate further rate declines. However, analysts warn that if demand does not increase, rates could fall by as much as 25% in 2026 due to the oversupply.

Container Spot Rates Extend Losing Streak Despite Factory ReopeningsCarriers hope blankings and post-CNY boost can bolster rates

Critics argue that the current market dynamics reflect a broader shift, with Drewry noting that the sharp decline in container spot rates contradicts expectations of rising demand. Maritime Strategies International (MSI) anticipates that rates could drop another 25% to 30% in the coming months, primarily driven by overcapacity rather than seasonal trends. The uncertainty surrounding tariffs on transpacific routes is expected to further impact demand.

Container Spot Rates Extend Losing Streak Despite Factory Reopenings

• “container spot rates are falling sharply, which indicates that the market is weak, contrary to the general expectation of rising demand and increasing spot rates before the CNY.” — Drewry

Container Spot Rates Extend Losing Streak Despite Factory Reopenings

• “We expect the Trump administration to pursue these routes to preserve tariffs and achieve its trade agenda, potentially increasing the cost of goods once again,” Moody’s said.” — Moody’s Ratings

Container Spot Rates Extend Losing Streak Despite Factory Reopenings

• “Overall, we anticipate that rates will soften further in 2026 and stabilise in the region of $1,000 per teu on the Asia-North Europe trade, and $1,500 per 40ft to the US west coast.” — Maritime Strategies International

Carriers hope blankings and post-CNY boost can bolster rates

The container shipping industry is currently navigating a complex landscape marked by declining rates, policy uncertainty, and potential oversupply. As factories in Asia gradually reopen, the market's ability to rebound remains uncertain, with analysts predicting further rate declines unless demand significantly increases.

Container Spot Rates Extend Losing Streak Despite Factory Reopenings