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Container freight rates diverged further last week, signalling a short-term shift in bargaining power across major east–west trades. Asia–Europe lanes have moved temporarily into a carrier-led phase, supported by an unusually early pull-forward of pre-Lunar New Year (LNY) cargoes, while the Transpacific remains structurally shipper-led as soft US import demand continues to cap pricing power. 

Asia–US West Coast spot rates fell 6% week on week to $1,964/FEU, giving back part of the early-December GRI uplift. East Coast rates rose 8% to $3,150/FEU, though pricing remains fragile, with rates still down 15% month on month. 

In contrast, Asia–Europe lanes remained comparatively stable despite ongoing overcapacity. Asia–Mediterranean rates held at $3,342/FEU, cementing a 15% gain since early December and marking the fourth successful GRI since mid-October. Asia–Northern Europe rates also stabilised at $2,449/FEU, comfortably above the mid-October low of around $1,700/FEU.

Market participants point to an earlier-than-usual pull-forward of LNY cargoes as the main source of support. The pattern mirrors late-2023 and 2024 behaviour, as shippers seek to rebuild inventories amid lingering uncertainty over Red Sea routings. Encouraged by recent firmness, carriers are preparing mid-month GRIs, targeting $4,200/FEU for Northern Europe and $4,750/FEU for the Mediterranean.

Nevertheless, the underlying supply overhang remains substantial. Asia–Europe volumes are up 8.6% year to date, yet spot rates sit 54% below last December’s levels, highlighting how far pricing remains from absorbing excess capacity.

Across the Transpacific, capacity discipline has so far only succeeded in preventing a deeper slide. Additional blank sailings have helped carriers defend the October lows of roughly $1,400/FEU on the West Coast and $3,000/FEU on the East Coast, but demand remains insufficient to anchor durable rate increases.

US import hesitation is being reinforced by policy uncertainty, with some manufacturers delaying shipments ahead of a Supreme Court ruling on tariffs imposed under the International Emergency Economic Powers Act (IEEPA). Hopes that the court could overturn the measures have encouraged a near-term pause in procurement decisions.

Looking ahead, fleet growth is set to accelerate again in 2026, coinciding with an S&P-forecast 2% contraction in US ocean import volumes. The ongoing cascade of ultra-large vessels into secondary trades is also raising concerns over vessel-size mismatches and renewed rate pressure beyond the main east–west corridors.

Meanwhile, a potential return to Red Sea transits would release significant capacity back into the market, though industry sources caution that insurers are likely to require 60–90 consecutive days of stability before underwriting such voyages. Separately, Mexico’s decision to raise tariffs on imports from non-free-trade-agreement countries adds another variable for Chinese exports, with potential implications for regional trade flows in the quarters ahead.

Written by: Aiman Haikal