Container Rates Slide for Fourth Week as Pre-Lunar New Year Surge Fizzles

Global container shipping rates fell for a fourth straight week, sliding 7% to $1,959 per 40-foot container as carriers face unexpectedly soft demand ahead of the Lunar New Year—normally one of the strongest shipping periods of the year.

The continued decline marks a clear break from seasonal norms. According to the Drewry World Container Index, spot rates fell across every major trade lane despite Chinese factory shutdowns approaching. Rates from Shanghai to Los Angeles dropped 8% to $2,239, while Shanghai–New York slipped 5% to $2,819.

“This downward trend highlights a significant shift in the market, as the traditional pre-Lunar New Year cargo rush is failing to materialise in 2026,” Drewry said.

Carriers have responded by pulling capacity at an unusually aggressive pace. Over the next three weeks, operators have canceled 18, 27, and 28 sailings on transpacific routes—well above typical seasonal levels, according to Drewry’s Container Capacity Insight.

Asia-Europe trades are showing similar weakness. Rates from Shanghai to Rotterdam fell 9% to $2,164, while Shanghai–Genoa dropped 7% to $3,048. Carriers have scheduled 9, 16, and 9 blank sailings on those routes over the same period as they brace for factory closures and rising market volatility.

The latest slide follows an already weak prior week, when the index stood at $2,107 per 40-foot container after three consecutive weeks of declines driven by softening demand and uncertainty over Suez Canal transits.

Market direction is now being shaped by competing forces. Diversions around the Cape of Good Hope continue to absorb roughly 2 million TEU of capacity—about 8% of the global container fleet—but the gradual return of some services to the Suez Canal is reintroducing capacity and clouding rate forecasts.

Drewry analyst Philip Damas said the timing and scale of any broader return to Suez will be a key swing factor in 2026. “The return to the Suez Canal is one of this year’s key variables for capacity, freight rates, and transit times,” he said, noting that carriers are weighing security risks, insurance costs, competitor behavior, and port congestion.

That cautious reopening began when Maersk and Hapag-Lloyd announced their ME11 service would resume Red Sea transits in mid-February, following trial voyages and a lull in attacks after the Gaza ceasefire in October 2025.

The industry remains split on risk tolerance. Days after Maersk moved back toward Suez, CMA CGM rerouted three Asia-Europe services around the Cape, citing “the complex and uncertain international context.”

“These conflicting decisions suggest capacity will return to the market gradually rather than all at once,” Drewry said, adding that a phased approach could limit the risk of a sharp spot-rate collapse.

Looking ahead, analysts continue to warn that global freight rates could fall by as much as 25% in 2026 as new vessel deliveries collide with softer demand, even if Red Sea conditions remain stable.

For Egypt, the stakes are high. The Suez Canal’s chairman has forecast a return to normal traffic levels by the second half of 2026. Before attacks began in late 2023, the canal handled about 12% of global seaborne trade and processed roughly 80 containerships per week.

With carriers now announcing 63 blank sailings for February—up sharply from 27 in January—the market appears braced for further rate pressure as factories shut down and cargo demand weakens.

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