The global shipping market is experiencing significant volatility, driven by factors like the ongoing Ukraine- Russia conflict and fluctuating trade tariffs between the US and China. Specifically, transpacific spot rates saw a sharp decline at the end of February, leading shipping companies to increase the number of “blank sailings” (canceled voyages) to stabilize prices, reports Baltic Exchange.
Key Factors
New US tariff charges on Chinese shipping could lead to a shift in shipping capacity between the US and Europe. In the Asia- Europe trade, spot rates have decreased by nearly 50% since January, following the Red Sea’s reopening. However, blank sailings suggest rates may not soon return to 2023 levels.
Key points:
- Trump Effect: Ongoing uncertainty regarding the Ukraine- Russia war and fluctuating US/China tariffs are creating confusion about spot and contract rate trends.
- JOC TPM 2025: The Journal of Commerce Trans-Pacific Maritime (TPM) 2025 conference is approaching. While spot rates are generally weaker than in 2024 due to resumed Suez transits, Asia- US West Coast rates remain strong leading up to transpacific contract negotiations.
- Blank Sailings: Carriers are implementing blank sailings to stabilize spot prices. By late February, 75,700 TEU of shipping capacity was blanked, a 449% increase. This strategy aims to improve capacity utilization and support rates.
Asia-US
Spot rate volatility is mirrored in futures rates. FBX01 front-month futures have declined, anticipating the FBX index drop on February 18th. They’re consistently priced at a discount to spot rates (backwardation), indicating spot rates remain significantly higher than 2023 levels before the Red Sea closure. The route continues to attract buying interest, particularly for Q3 and Q4, at a discount slightly below spot prices.
FBX03 has also seen similar interest. However, the narrowing FBX01/FBX03 spread has prompted caution due to increased volatility and price action aligning more closely with FBX03.
The impact of new US tariffs on Chinese shipping has not yet been reflected in futures prices. Depending on vessel size, these tariffs could increase 40-foot container rates by $100 to $800 per FEU.
Asia-Europe
Price trends for North Europe and the Mediterranean have been more pronounced, directly influenced by the Red Sea’s reopening and the fragile Gaza/Israel peace agreement. Spot rates have dropped nearly 50% since their January 9th high, impacting February futures positions. However, this creates a new, more favorable baseline for Beneficial Cargo Owners (BCOs) and end-users hedging with futures. Index-linked contracts will also benefit both BCOs and carriers, as spot rates are now below long-term contract prices but remain sensitive to the volatile Asia-Europe market.
FBX11 futures prices have declined weekly, accurately predicting spot price movements. Front-month futures are down about 13%, and the full FBX11 Cal26 (2026 annual contract) is down roughly 30%.
The Asia-Europe/Mediterranean trades will also be affected by potential capacity shifts due to US tariffs on Chinese shipping. Larger vessels in the global fleet may be redirected to the Europe route. Blank sailings are being implemented to slow spot rate declines and address fleet utilization concerns, with a slight increase observed.
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Source: Baltic Exchange
