- Route Restructuring Accelerates Across Major Trades.
- Newbuild Deliveries Deepen Oversupply Concerns.
- Suez Canal Normalisation Could Pressure Rates.
Container carriers are stepping up their game by expanding blank sailings and reshuffling routes to navigate the tough market landscape, which is being shaped by persistently low freight rates and uncertainty surrounding the resumption of Suez Canal transits. Meanwhile, these carriers are also ramping up their capacity in anticipation of the next growth cycle. Recent market data reveals that carriers around the globe have announced 75 blank sailings on major routes this month, an increase of over 50% compared to the same time last year. Additionally, 35 more sailings have already been scrapped for January, reflecting their efforts to strike a balance between supply and demand, reports Chosun Biz.
Freight Rates Under Pressure
Should Suez Canal transits resume and ton-miles take a dip, we can expect freight rates to face renewed pressure. While rates have seen a slight uptick in recent weeks, they still lag significantly behind last year’s figures. The benchmark freight index was recorded at 1,656.32 late in the month, which is still over 30% lower than the same time last year. Rates skyrocketed during the pandemic, plummeted sharply afterwards, saw a brief rebound during the Red Sea disruption, and have since weakened again. The index has consistently averaged well below last year’s levels, underscoring the ongoing softness in the market.
Capacity Growth Outpaces Demand
The influx of new vessels ordered during the pandemic boom has led to a significant increase in supply. While container throughput is expected to grow steadily in the coming years, fleet capacity is expanding at a much quicker rate, raising concerns about potential oversupply. By the end of the decade, capacity growth is anticipated to far outstrip demand growth, reinforcing fears of continued downward pressure on freight rates.
Suez Canal Normalisation Looms
Shipping alliances are gearing up for a return to regular Suez Canal transits starting next year, which increases the chances of route normalisation. If everything goes back to normal, freight rates could drop back toward the levels seen before the Red Sea crisis, with forecasts indicating further declines next year.
Carriers Keep Expanding Even in Tough Times
Even with rates taking a hit, carriers are still placing orders for new vessels and snapping up secondhand ships. In fact, total container ship orders hit an all-time high in 2025, showing a strong belief in the future of trade growth. Many carriers are investing in fuel-efficient and alternative-fuel ships while also boosting their fleets, especially in the midsize category, to stay competitive when demand picks up again.
Stronger Financial Health Lowers Crisis Risk
Unlike the downturn we saw in 2015–2016, carriers are entering this slowdown with a solid financial footing that they built during the pandemic boom. Debt levels have dropped significantly, and liquidity has improved across the industry.
A shipping industry official said, “Although the outlook for rate declines due to oversupply is dominant, unlike past crises, carriers’ financial health is solid, so large carriers have little incentive to drive rates down through cutthroat competition,” adding, “If environmental regulations lead to more scrapping of older ships, the oversupply issue could be alleviated to some extent.”
Did you subscribe to our daily Newsletter?
It’s Free Click here to Subscribe!
Source: Chosun Biz
