- Spot rates for ocean container freight continue falling, with a 5-10% drop expected in February.
- Shipping companies are increasing blanked sailings to restrict capacity and stabilize prices.
- While rates are still high compared to pre-Red Sea crisis levels, factors like ship supply, geopolitical risks, and tariff policies could drive further changes.
Freight rates for ocean container shipping are dropping further in February, driven by easing geopolitical tensions and reduced demand due to the Lunar New Year. Carriers are responding by limiting capacity to curb the decline, reports Xeneta.
Falling Freight Rates Amid Ceasefire & Lunar New Year
Xeneta reports that spot rates from the Far East to North Europe and the Mediterranean have fallen 22% and 13% since January, with additional declines expected in early February.
Similarly, rates to the US East and West Coasts saw drops of 7% and 14%, respectively. While US-bound rates stabilized in late January, further reductions are likely.
Carriers Adjust Capacity to Counter Rate Drop
To combat falling rates, ocean carriers are ramping up blanked sailings, significantly reducing available capacity.
From the Far East to North Europe, blanked capacity is set to rise by 449% by late February, while the Far East to Mediterranean capacity reductions will increase by 318%.
Market Uncertainty and Potential Challenges Ahead
Despite recent declines, rates remain significantly above pre-Red Sea crisis levels. The potential for increased exports post-Lunar New Year, along with geopolitical shifts—such as a lasting ceasefire or new trade policies—could impact future pricing.
Additionally, record-high ship deliveries could further destabilize markets if Red Sea routes reopen at scale.
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Source: Xeneta
