Freight rates soften as congestion and surcharges cloud outlook

THE WEEK started well, but by midweek I had put my hoodie on backwards and wondered why I couldn’t see. It’s been that kind of week! Anyway, plenty happening in shipping, so let’s get into it.

Let’s kick things off with freight rates. The Drewry World Container Index edged down 1% this week, with mixed results across the Transpacific. Rates to the US East Coast fell, while the West Coast held steady. Easing congestion at Chinese ports and more capacity are putting pressure on rates, but the US trade remains a very lucrative market for carriers. Alphaliner reports carriers are earning five times more spot revenue per nautical mile on the Transpacific than on shipments to North Europe via the Cape of Good Hope. Wow.

Asia-Europe rates also softened as more services returned to the Suez Canal, adding capacity. However, the risk of vessel bunching at European ports is still one to watch.

The Intra-Asia Index fell around 2%, with rates moving in different directions across the region. Congestion is easing at major Chinese ports, but Singapore is heading the other way, with worsening delays pushing rates higher. Geopolitical tensions and weather disruptions continue to keep the market on its toes.

And it’s not just the delays we need to factor in. ANL has introduced two additional surcharges: a congestion surcharge from 1 December to 31 January 2027, and a USD 300 overweight surcharge per TEU for containers weighing 15 tonnes or more (including tare), effective 15 Nov. Both apply to cargo moving from North-East Asia, South-East Asia, the Indian Subcontinent and the Middle East into Fremantle only. Whether these increases will stick remains to be seen.

It’s a bit of a mixed message in the market, with some shipping lines introducing surcharges while others are forecasting softer demand. The steady stream of emails and WhatsApp messages from overseas forwarders suggests plenty are seeing the softer side, with some very competitive rates starting to emerge. My advice? Shop around, as there are some great prepaid options out there.

It’s also worth noting that Australian ports are experiencing significant vessel bunching at the moment, causing berthing delays, disrupting schedules and putting pressure on both equipment and slot availability.

What else is happening?

💠 ONE ends slot charter on Maersk’s Qilin service
💠 CMA CGM cuts transatlantic leg from PAD service
💠 Grimaldi orders 10 car carriers in China
💠 DP World launches China-Africa service
💠 First ammonia-powered bulker bunkers at Port Hedland
💠 ONE raises full year profit forecast
💠 Wallenius Wilhelmsen reports solid Q3 results
💠 Maersk raises full-year forecast on strong ocean results
💠 PIL orders seven methanol ready feeder ships
💠 PIL names former PSA executive as CEO
💠 IMO backs Dominguez for second term

💠 Maersk orders 26 LNG dual fuel containerships

Today’s photo is of the APL Boston. And if you’re thinking she’s a large vessel, you’re right, she measures around 328 metres in length.

Have a great weekend everyone!