Weak Demand Pushes Container Shipping Rates Down Following Early Year Spike

This week, global shipping rates for containers dropped sharply, erasing most of the gains from a brief rally in January. Carriers are finding it hard to keep prices steady due to weak demand and ongoing geopolitical issues.

Global container shipping rates fell sharply this week, surrendering most of the gains from a brief January rally as carriers struggled to maintain pricing power amid weak demand and ongoing geopolitical volatility.

The Drewry World Container Index dropped 4% to $2,445 per 40-foot container, driven primarily by declines on key Transpacific and Asia-Europe trade lanes. The retreat marks a significant reversal from the previous week, when the index had surged 16% to $2,557.

Transpacific routes bore the brunt of the correction. Spot rates from Shanghai to New York fell 10% to $3,568 per container, while Shanghai to Los Angeles declined 7% to $2,909. The weakness came despite the looming Chinese New Year factory shutdowns in mid-February, which typically drive rate increases as shippers rush to move cargo ahead of the holiday.

“Carriers were unable to sustain rates because of weak demand,” according to Drewry’s assessment, suggesting that the previous week’s rate hikes were opportunistic moves that the market ultimately rejected.

Asia-Europe lanes also softened, with Shanghai-Rotterdam rates declining 3% to $2,763 per container and Shanghai-Genoa falling 1% to $3,839. The pressure on these routes reflects continued uncertainty in the Red Sea, where ocean carriers have put on hold their plans to resume transits “amid escalating protests in Iran and the risk of direct US military intervention,” according to Drewry.

The volatility underscores the fragile state of the container market as 2026 begins. While Maersk announced on Thursday that it would permanently resume trans-Suez routing for its MECL service, most carriers remain deeply cautious. In the week ending January 11, traffic around the Cape of Good Hope surged to 203 voyages, more than double the previous week’s total.

“The return to the Suez Canal is one of this year’s key swing factors for capacity, freight rates and transit times,” said Drewry’s Philip Damas, who expects carriers to proceed cautiously while monitoring insurance costs, competitor behavior, and port congestion risks.

With broader U.S.-China trade measures looming and Red Sea security risks unresolved, the container market appears set for continued turbulence in the months ahead.

By: Mike Schuler / GCaptain and Ocean Crew