Global container freight rates fell for the first time in a month, marking the start of the traditional post-holiday decline, while persistent uncertainty in the Red Sea continued to weigh on market expectations.
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The Drewry Global Container Index fell 5 percent this week to $1,859 per 40-foot container, ending a four-week streak of gains. The sharpest pullback came on Pacific routes: Shanghai-to-New York cash rates fell 15 percent to $3,254, while rates to Los Angeles fell 12 percent to $2,328. Analysts note that the decline follows a volatile early-season surge, largely driven by a temporary general rate hike that faded after retailers finished importing over the holidays.
Drewry expects rates to soften slightly or hold steady next week as carriers struggle to maintain pricing power amid weakening demand.
However, in the Asia-Europe corridor, rates showed more flexibility. The Shanghai to Genoa spot price rose 4 percent to $2,193, while the Shanghai to Rotterdam price rose 3 percent to $2,028. Carriers are trying to raise rates on these lines ahead of the annual contract season, introducing new FAK levels of $3,000 to $3,650 per FEU from November 15.
However, market fundamentals remain fragile. Drewry’s latest container forecaster warns that the supply-demand balance is expected to worsen further in the coming quarter – especially if normal Suez Canal transit resumes after the recent Houthi ceasefire announcement.
Peter Sand, senior analyst at Xeneta, warned that a rapid return to the Red Sea could send shock waves across the global market. “The details are incomplete and you cannot base the safety of crews, ships and cargo on the words of Houthi militias,” he said. “Carriers need a lot more reassurance than that, and perhaps more importantly, insurance companies too.”
Xeneta estimates that the diversion around the Cape of Good Hope currently absorbs approximately 2 million TEUs of global container capacity, with some analyzes suggesting an 8 percent drop in available supply. A sudden return to Red Sea transits could put this capacity back on the market just as demand eases.
“Average spot rates from the Far East to Northern Europe, the Mediterranean and the US East Coast have all fallen more than 50% since the start of the year,” the document noted. “The massive return of vessels to the Red Sea will inject significant excess capacity and drive rates even lower – not just in affected trades but globally.”
Maritime security experts are cautious despite the ceasefire signals. While the risks of an attack across the Red Sea, Gulf of Aden and surrounding waters have decreased, Houthi forces have retained the ability to attack merchant ships. The conditional nature of the ceasefire means that hostilities could quickly resume if regional tensions escalate.
As 2026 approaches, operators face a challenging landscape. Sand warned that many are already approaching loss territory and that even if Red Sea conditions remain unchanged, global shipping rates could drop by as much as 25 percent next year. He said shippers should prepare for all scenarios: “A large-scale return to Suez routes would disrupt global supply chains by reconfiguring services and cause significant volatility.”
Meanwhile, high marine insurance premiums and persistent concerns about the safety of crew and cargo remain major obstacles to a widespread resumption of Red Sea transit.
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