Shippers preparing for 2026 contract tenders should view the October spot rate spike with caution, using a data-driven approach to maintain their strong negotiating position against a background of long-term overcapacity. The rise, which is partly attributed to carrier capacity management coinciding with the tender season, is likely an attempt to influence market sentiment before negotiations begin.
Data-Driven Perspective for Shippers
Shippers should remain calm and leverage the following key data points:
- Spot vs. Long-Term Rate Spread: The most critical factor is the relationship between current spot rates and the average long-term contract rates (signed in the last three months).
- Far East to North Europe: Even after the mid-October spike, average spot rates are still approximately $200 per FEU below the average long-term rate. This indicates that shippers are not incentivized to lock into current long-term contracts.
- Transpacific (US West Coast): The spike brought spot rates slightly above long-term rates, but the difference is minimal (only $125 per FEU).
- Year-over-Year Decline: Despite the recent increase, both spot and long-term rates remain significantly lower compared to one year ago, reinforcing the long-term trend of rate decline.
- Far East to North Europe: Spot rates are down 41% and long-term rates are down 24% year-over-year.
- Far East to US West Coast: Spot rates are down 60% and long-term rates are down 42% year-over-year.
- 2026 Forecast: The overall market outlook, as presented in reports like the Xeneta Ocean Outlook 2026, still forecasts overall lower long-term and short-term rates next year due to a persistent issue of carrier overcapacity.
Reasons for the Spot Rate Increase
The mid-October spot rate increase is likely a result of:
- Carrier Capacity Management: The spike, especially into the US, is partly explained by carriers having removed excessive capacity relative to demand. October saw the lowest deployed capacity on the US West Coast trade since the sharp demand drop following the “Liberation Day” tariffs on April 1st.
- Market Sentiment Tactic: It is notable that spot rates increase just as shippers prepare for tenders. Carriers know a falling rate environment harms their negotiating leverage and appear to be using timely and effective capacity management (e.g., blanked sailings) to firm up rates and influence sentiment just before negotiations begin.
Historical Context and Negotiation Strategy
Shippers should look to the previous year’s negotiation cycle for guidance:
- Q4 Spot Rates ≠ Q1 Contract Rates: In the 2025 tender cycle, long-term rates entering validity in January 2025 came in at the same level as the long-term rates in Q4 2024, despite an increase in spot rates toward the end of the year. A Q4 spot rise does not automatically translate into higher long-term contract rates.
- Longer Contracts, Better Rates: Carriers previously offered significant discounts for shippers who committed to longer agreements (e.g., contracts lasting more than six months) because rates were universally expected to continue to decline. For the Far East to Mediterranean trade, contracts over six months were secured at rates 45% lower than those lasting three to six months. Shippers can expect carriers to again incentivize longer contracts to secure volume against the backdrop of overcapacity.
Shippers are therefore in a strong position to secure better contract rates for 2026 than they did for 2025.
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Source: Xeneta
