'Container prices fall below those of 2025'

Despite geopolitical tensions and additional cancellations of sailings, container rates remain under pressure. Container prices have declined for the third consecutive week. Overcapacity continues to put pressure on prices and that capacity is only increasing, as more container ships will be delivered this year. The World Container Index from Drewry shows a somewhat mixed picture. Spot rates on routes from Shanghai continue to decline (by -5% to -7%), while Rotterdam to New York and vice versa and LA to Shanghai show slight increases. Overall, this results in a decrease of the index (for the third week in a row) by 5%. Notably, significantly more sailings have been canceled for February than in January (63 compared to 27 according to data from Drewry), a tool to support prices. From February 17 to March 3 is the celebration around the Chinese New Year and many factories in China are closed. Drewry expects the decline in container rates to continue in the coming weeks. The military threat from U.S. President Donald Trump and his 'armada' of aircraft carrier USS Abraham Lincoln and multiple destroyers that have arrived in the Middle East has not yet led to widespread action among shipping companies. After threats against Iran, the fleet departed, and a military exercise has now also been announced to demonstrate America's military capabilities. The Iran-backed Houthi rebels in Yemen have threatened to resume attacks on ships in the Red Sea at the moment Iran is actually attacked. Moreover, shipping companies have not returned en masse to the route via the Suez Canal. CMA CGM withdrew ships from the region one and a half weeks ago to reroute them via the Cape of Good Hope. Maersk will allow ships from India to the east coast of the U.S. to sail through the Suez Canal again. However, the shipping company is closely monitoring the security situation. Despite the rerouting via the Cape of Good Hope and a renewed upturn in that, overcapacity is only growing larger. An unprecedented influx of new ship capacity continues to enter the market, putting downward pressure on rates and shipping companies' revenues. Despite clear signals of overcapacity, shipping companies continue to order new ships and keep older ships in operation, states data platform Freightos, which recently held a webinar on this subject. Shipping companies are refraining from phasing out ships, despite concerns about overcapacity. According to Freightos, older ships serve as a buffer against unpredictable disruptions in global shipping, such as during the coronavirus pandemic and the Red Sea crisis. The high profits from the pandemic years have also allowed shipping companies to pay off their debts, reducing the incentive to scrap capacity and creating room for new ship orders. In the short term, Freightos therefore expects sharp rate declines with prices sinking below 2025 levels.