Container Shipping Rates Fail to Rise as Carriers Reverse December GRI Plans
With Christmas approaching—a period traditionally unfavorable for container freight rate hikes—plans by several carriers to implement a December 1 General Rate Increase (GRI) quickly collapsed. On the afternoon of December 1, one major Asian carrier alliance member announced it would cancel its planned rate increase, immediately dragging market prices back down and prompting expectations that other alliance members would follow.
As a result, spot rates fell back to:
US West Coast (USWC): USD 1,450/FEU
US East Coast (USEC): USD 2,300/FEU
The anticipated “1.5-day rally” ended in less than a day.
Why the Rate Hike Failed Instantly
Several market factors contributed to the breakdown of the December 1 GRI:
1. Weak demand and low vessel utilization
Current load factors on major trans-Pacific trade lanes are only 60–70%, making it difficult for carriers to push rates higher.
2. Pre-GRI discounting already weakened the market
Prior to the intended increase, rates as low as USD 1,350/FEU to the US West Coast were already available, signaling deteriorating demand.
3. A major non-alliance carrier delayed its GRI by one week
This further undermined the industry’s attempt to stabilize or lift spot prices.
4. First carrier to reject the GRI gained a competitive advantage
Analysts believe the early mover will secure more bookings and achieve a higher load factor for the sailing—making the strategy a short-term success.
Europe Trades: No GRIs at All
Unlike trans-Pacific routes, Asia–Europe carriers issued no December 1 GRI notices. With most operating ultra-large container vessels (ULCVs), and demand not matching supply, carriers opted not to attempt rate increases.
Blank Sailings Cannot Stop Market Weakness
According to Drewry, between Week 49 of 2025 (Dec 1–7) 그리고 Week 1 of 2026 (Dec 29–Jan 4):
56 out of 719 scheduled sailings were canceled
Equivalent to an 8% blank sailing ratio
Breakdown:
48% on trans-Pacific eastbound
25% on Asia–Europe/Mediterranean
27% on trans-Atlantic westbound
92% of all sailings are still operating normally
Blank sailings help absorb capacity but remain insufficient to offset the overwhelming oversupply in the market.
Industry Earnings Drop 53% in 2025 — but Carriers Are Still Financially Safe
Alphaliner’s latest weekly report shows:
For the first three quarters of this year, the Top 10 global carriers (excluding MSC) recorded a 53% year-on-year profit decline
Despite this, most remain in the black
Massive profits from the past five years continue to support long-term financial stability
However, Alphaliner forecasts further profit contraction, citing:
No major geopolitical disruptions to stimulate demand
No significant improvement in cargo volumes on major trade lanes
Demand Outlook Turns More Pessimistic
Maritime Strategy International’s (MSI) Horizon Report presents a bleak outlook:
Trans-Pacific eastbound
Expected to see significant contraction in the next three quarters.
Asia–Europe westbound
Volume slowdown expected.
Trans-Atlantic westbound
Growth also projected to weaken.
While Northern Europe port congestion has temporarily supported Asia export rates, MSI warns:
“All three major East–West trade lanes will face demand slowdown throughout 2026, while capacity continues to rise.”
MSI also expects:
2026 freight rates to remain low
Ship scrapping activity to stay minimal
Charter Market Diverges from Liner Market Trends
A major anomaly continues:
Most newbuilding orders are for large vessels
But the charter market relies heavily on smaller and mid-sized vessels
Because supply of smaller ships is limited, and liner operators continue chartering them:
Charter rates remain strong
The charter market appears disconnected from the weak freight market
Potential Wildcard: U.S. Supreme Court Ruling on Trump Tariffs
A major U.S. Supreme Court case could disrupt the market:
Multiple U.S. importers are challenging Trump-era tariffs imposed under the International Emergency Economic Powers Act (IEEPA)
A ruling is expected between early spring and June
If tariffs are suspended or invalidated, MSI predicts:
“Another wave of front-loaded imports may occur as U.S. companies rush to restock ahead of policy uncertainty.”
This could temporarily boost trans-Pacific demand.
Overall Market Sentiment Remains Negative
Linerlytica’s latest assessment states:
Container demand growth remains below fleet capacity growth
Outlook for the remainder of the year is weak
Winter slack season increases pressure on rate levels
Trans-Pacific rates face the greatest downward pressure
If ships return to the Suez Canal, supply capacity will increase further—worsening market imbalance
Despite attempts to raise rates, carriers are facing:
Weak demand
Excess capacity
Softer-than-expected peak-season volumes
Lack of supportive geopolitical disruptions
With oversupply worsening and demand slowing across all major east-west trades, container freight rates are likely to remain depressed heading into 2026, unless a major external shock reshapes the market.
