- Asia–Europe container rates remain firm despite excess capacity
- Early pre-Lunar New Year demand is offering short-term support
- Red Sea uncertainty and insurance risks continue to shape the outlook
Despite growing signs of overcapacity, container rates on Asia–Europe routes have managed to hold recent increases. Prices on both Northern Europe and Mediterranean lanes remain well above their mid-October lows, supported by capacity management and short-term demand strength. The market has shown resilience even as fleet growth continues to weigh on fundamentals.
Demand Shows Early Seasonal Uptick
Market participants report a noticeable rise in bookings as some shippers begin pre-Lunar New Year ordering earlier than usual. There is also speculation that inventory buffers are being built in anticipation of future disruptions, particularly linked to a potential Red Sea return. This pattern mirrors previous years, where December demand provided temporary rate support.
Capacity Growth Caps Upside
Even with diversions still in place and volumes improving, spot rates remain significantly lower than the same period last year. The main reason continues to be fleet expansion, which has added structural pressure across major east-west trades. While short-term rate increases are possible, sustained rebounds remain difficult under current supply conditions.
Red Sea Risk Still a Key Variable
A return to normal Red Sea transits remains uncertain, with insurance considerations playing a central role. Market experts suggest a prolonged period of calm would be required before risks are reassessed. Once diversions end, effective capacity is expected to rise further, adding downside pressure unless demand improves meaningfully.
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Source: Ajot
