Container Freight Rates Retreat as Seasonal Lull Pressures Carriers' Pricing Power

Global container shipping rates declined in early November as carriers confront mounting pressure from seasonal demand weakness and expanding capacity on major East-West trades, threatening the fragile rate recovery achieved through autumn capacity management measures.

The Drewry World Container Index fell 5 per cent between the first and second weeks of November to $1,859 per 40-foot container on 13 November, marking rates 46 per cent lower than the previous year. Asia-US West Coast rates dropped 6 per cent week-on-week, whilst transpacific carriers face particular turbulence as daily spot prices to the East Coast plummeted over 20 per cent to approximately $3,000 per FEU.

Judah Levine, head of research at Freightos, noted that container carriers have been contending with downward pressure since October from both the seasonal lull and growing capacity on major trades. Whilst significant capacity reduction steps enabled carriers to push through October general rate increases that rescued rates from two-year lows, those gains now appear imperilled. Some carriers planning December rate increases may reconsider given this week's sharp retreat, Levine observed.

The rate pressure comes as vessel wait times have grown to eight days at some European ports, whilst global schedule reliability gradually improves. Capacity is slowly being reinstated on eastbound transpacific routes, though conditions remain tight for North American exporters shipping westbound and to Europe.

Market uncertainty extends beyond operational challenges. The ceasefire between Israel and Palestine could enable increased Suez Canal traffic, though carriers remain cautious about abandoning Cape of Good Hope routing after investing billions in adjusted sailing schedules throughout 2025. Any widespread return to Red Sea transit would first trigger European port congestion before ultimately intensifying rate pressures across all major lanes.

Drewry forecasts 2025 will deliver softer freight rates and slower volume growth as congestion eases and economic uncertainties mount.