Key market signals
-51%
China to LA spot rate drop from 2025 peak to mid-November 2025
Drewry / Freightos
10M TEU
New vessel capacity on order globally, equal to one third of the entire active fleet
S&P Global / Xeneta
0%
Full-year TEU demand growth forecast for 2026
Drewry Supply Chain Advisors
What is driving this
Rates falling
A structural downcycle, not a temporary dip
Rates on major lanes are forecast to decline more than 10% across most trade routes in 2026. Spot rates from China to Los Angeles fell by half to mid-November 2025, reaching around $2,328 per 40-foot container. Overcapacity, not demand collapse, is the primary driver.
Tariff whiplash
2025 frontloading distorted the entire year
U.S. tariff implementation, pauses, and reversals triggered waves of frontloaded imports throughout 2025, skewing H1 volume sharply higher and H2 lower. Asia-North America traffic that grew 15% in 2024 turned negative by Q4. Drewry forecasts zero growth for the full year of 2026.
China pivot
China diversified exports faster than carriers could follow
China grew exports to Europe by more than one million TEUs in the first 11 months of 2025, up 10.3% year on year, with similar growth into the Middle East and India, all while absorbing a 1.7 million TEU decline to North America. Global volumes grew even as transpacific contracted.
The make-or-break variable
Red Sea
The variable that determines whether 2026 is a slow decline or a sudden shock
An estimated 2 to 2.5 million TEUs, roughly what was delivered across all of 2024, is currently deployed on extended Cape of Good Hope diversions. If all carriers return to Red Sea routing, ton-mile demand falls by 10% or more overnight. That latent capacity hits a market that is already structurally oversupplied.
Insurance is the real constraint. Many shippers are instructing forwarders to route via Cape of Good Hope regardless of carrier preference because their policies do not cover Red Sea transits. Some carriers have begun trialling Red Sea routes on specific loops, but a full-scale return has not happened and is not expected in H1 2026.
Carrier reality
Carriers are under margin pressure. Use it at the negotiation table
Maersk has said recent quarters were weak and the outlook is not improving. Charter market costs still exceed freight market earnings on many lanes, particularly vessels up to 10,000 TEU. Do not accept claims of tightness without evidence. This is a buyer's market.
"Do not be afraid to call the bluff of anyone trying to claim there is a tightness here, a lack of capacity. It is out there somewhere to be found."
Geopolitical signal: Russia / Ukraine, year four
Three freight fronts in an unresolved war
Status: March 2026
Partial progress
Black Sea: a ceasefire on shipping, not on land
U.S.-brokered Black Sea talks produced an agreement to restore Russia's access to global agricultural and fertilizer shipping lanes and lower maritime insurance costs. Ukraine's grain corridor has partially reopened. No comprehensive land ceasefire has followed. Insurance markets still price this route as elevated risk. Act on the opening for grain-adjacent lanes, but treat it as fragile.
Ongoing disruption
European road and rail: driver shortages and closed corridors
Mobilization of Ukrainian men has drained an estimated 25% of Ukrainian truck drivers from European haulage networks. The China-Europe rail corridor via Russia remains largely off-limits due to sanctions and client risk. The Middle Corridor via Kazakhstan, Azerbaijan, and Turkey is the working alternative, though it is longer and more expensive.
Scenario to watch
If a ceasefire lands: reconstruction freight and route resets
A genuine ceasefire would release reconstruction logistics demand into Eastern Europe, ease driver supply, and potentially reopen the Russia rail corridor over time. Forwarders with Eastern European agent networks and multimodal capability would be first movers. Build optionality now so you can move when the window opens.
Intelligence and the quoting gap
What you buy is not what you get
China to UK main ports · Xeneta data, Freightify Freight Flow Webinar, Feb 2026
Southampton: 3 ships at port, 5 waiting as of Feb 2026. Carrier selection at the lane level is a margin decision, not just a logistics one.
The digital forwarding shift
45%
of forwarders currently automating documentation, compliance, and invoicing workflows
19%
CAGR in digital freight forwarding through 2031, from $41B in 2025 to $119B
$49B
Estimated digital freight forwarding market size in 2026
Forwarder scenario stack
A
Cape of Good Hope routing holds for the majority of 2026
Manage inventory for longer transit times. Lock in contract rates while leverage is on your side, as carriers need volume. Monitor surcharge creep: carriers will try to recover margin through detention, demurrage, and environmental fees.
B
Gradual Red Sea return begins in H2 2026
Build buffer stock ahead of the tipping point. Shore up carrier relationships on lanes where reliability will tighten first. The transition will feel gradual until suddenly it is not, and the tipping point arrives fast when it comes.
C
Full-scale return triggers a port congestion shock
Pre-position on the hinterland. Confirm alternative routing and carrier options before the spike, not during it. Ports like Southampton are already showing waiting ships. This is what demand surge into constrained infrastructure looks like.
"AI needs clean data to work. Rate management forms the foundation. Then you can build agentic AI on top of it, making the whole process of quoting to a customer a lot more seamless and a lot faster."
