Asia–US freight rates plunge as overcapacity erases November gains

Container freight markets have faced renewed pressure for the past few weeks following an upturn sparked by China - US trade war uncertainty and November rate hikes during October and early November. Excess vessel supply, moderating demand and fading GRI (general rate increase) momentum have driven sharp weekly declines across Transpacific lanes.

The latest data from Freightos and Drewry effectively erased the increases secured during the mid-October and November rate hikes, raising fresh doubts over carriers’ ability to implement December GRIs.

Freightos: Shanghai - Los Angeles route faces sharper declines

Freightos reported that China–US West Coast rates dropped 32% last week to $1,900/FEU and slipped a further $100 this week, leaving them only slightly above the early-October floor near $1,700/FEU. Cumulative decrease has reached 42% since the latest peak in early November on the China - US West Coast route.

East Coast rates showed a similar pattern, declining 8% two weeks ago to $3,400/FEU. The decline gained speed last week, placing Shanghai–New York at $2,863/FEU, down another 17% and suggesting the lowest level of the past three months. Analysts noted that the mid-October and November GRIs—briefly lifting West Coast rates above $3,000/FEU—have now fully unwound amid persistent oversupply on East–West trades.

Drewry: China - US routes slump to a-year-lows

Spot freight rates from Shanghai to Los Angeles and New York have been on a decline for the past three weeks, according to Drewry. Differing from Freightos, Drewry data indicated a bigger loss for the East Coast as it posted a cumulative decrease of 29% to around $2,700/FEU, indicating the lowest level of the past one year.

The West Coast, meanwhile, has slid by 21% since early November with last week’s rates standing around $2,000/FEU.

Capacity discipline erodes as blank sailings recede

The latest declines have been driven in part by carriers reducing blank sailings, allowing more capacity to return to the market just as seasonal demand cools. This has diminished pricing discipline and left little support for planned December increases. Market observers expect downward pressure to continue unless carriers tighten capacity or demand improves meaningfully.

Diverging sub-trades highlight market volatility

Although the broader trend remains bearish, individual trade lanes showed mixed performance. On the Pacific, Freightos eastbound rates recorded the steepest weekly declines, while backhaul flows from North America to Asia strengthened modestly.

In the Atlantic, movements were similarly uneven, with North America–North Europe rates rising while the Europe–US East Coast return leg dropped significantly.

Asia–Europe remains relatively strong; potential return to Suez adds new pressure points

Asia–Europe routes via Suez were relatively stable, with China–North Europe unchanged and China–Mediterranean slightly lower. After six consecutive weeks of gains on Asia–Europe, carriers are now attempting to lift December FAK levels toward $3,000–$4,000/FEU, though market sentiment remains cautious.

Operational developments surrounding the Suez Canal have become an increasingly important factor for the near-term outlook. Freightos noted that the tentative Gaza ceasefire has revived discussions around a gradual carrier return to the Red Sea route. CMA CGM has already expanded its services, while others—including Maersk—remain cautious.

A full reinstatement of pre-crisis volumes, potentially amounting to 2 million TEUs, could cause vessel bunching and congestion across key European hubs, temporarily absorbing capacity and offering limited support for rates. However, industry expectations point toward a phased return to minimize disruption, as a rapid shift could destabilize schedules during an already fragile period.