Container freight spot rates have fallen sharply across major east-west trade routes this week, bringing a six-week rally to a halt, as the market adjusts to easing geopolitical tensions in the Middle East, persistently weak demand and mounting cost pressures from elevated bunker fuel prices. Carriers are increasingly turning to spot rate discounts and aggressive blank sailing programs to protect revenues and stabilize pricing amid a challenging market environment.
The Drewry World Container Index (WCI), a key benchmark for global container rates, dropped 3% week-on-week to $2,246 per 40ft container—the first decline after six consecutive weeks of gains that were largely driven by bunker fuel surcharges amid the late-February Middle East conflict and disruptions in the Strait of Hormuz. The reversal comes as the market recovers from the initial shocks of the Hormuz crisis, where the strait was effectively closed to most commercial shipping for weeks, disrupting global fuel supplies and pushing up bunker costs.
Across Asia-Europe routes, rates continued their downward trend, with the WCI’s Shanghai-Rotterdam leg falling 3% week-on-week to $2,229 per 40ft, and the Shanghai-Genoa route dropping 2% to $3,343 per 40ft. Freight forwarders operating on Europe-Asia trades confirmed that nearly all carriers have introduced spot rate discounts by the end of the week, as weak demand and excess capacity weigh on the market.
“Rates are very weak right now, and we’re seeing universal discounting from carriers—some were slower to start, but all have joined in with general reductions across FAK and spot rates,” one freight forwarder told industry sources, noting that the discounts are a direct effort to protect revenues amid soaring bunker costs. Since the outbreak of the Middle East conflict, the shipping industry’s daily bunker fuel expenditure has increased by $395 million, with additional costs totaling $5.34 billion as of early April. Bunker prices remain highly variable across global ports, with ultra-low sulfur fuel oil (VLSFO) costing as much as $1,164 per ton in Los Angeles, compared to $750 per ton in Rotterdam and $868 per ton in Singapore.
European demand for Asian goods is also showing signs of weakness heading into late April and May, adding to carriers’ challenges. “We’re observing declining demand in several sectors, and retailers are slowing production to wait and see how the Middle East situation unfolds,” the forwarder added. “But there’s uncertainty about how long they can hold off, as inventory levels start to thin.”
Chantal McRoberts, Director of Drewry Supply China Advisors, emphasized that the current market differs sharply from the pandemic era, when geopolitical disruptions often boosted demand. “This is not a growth-boosting scenario—it’s quite the opposite,” she explained. “The recent spot rate surge was driven by all-in pricing that included high bunker surcharges. Post-ceasefire, bunker prices fell 9% relative to rates, but rates still rose 1%. This week’s decline, seen across both Asia-Europe and transpacific routes, reflects not just falling fuel prices but also extremely soft demand, particularly on Asia-Europe lanes, where excess capacity remains a persistent issue.”
Capacity growth on key routes is exacerbating the imbalance. According to Linerlytica, structural capacity on the Asia-North Europe trade has increased by 3% due to the launch of CMA CGM’s standalone Japan-North Europe OCR service, while the Asia-Mediterranean trade has seen a 10% capacity rise from the addition of Gemini’s SE4/AE19 and MSC’s Phoenix services. Notably, no forwarders reported issues securing space or equipment in Asia, further indicating ample supply relative to demand.
On transpacific routes, the WCI’s Shanghai-Los Angeles and Shanghai-New York legs both declined 3% week-on-week, ending at $2,810 and $3,552 per 40ft respectively. However, some shippers are finding relief through “blended rates” offered on the US west coast, according to US west coast forwarder Freight Right. These rates, often tied to fixed agent contracts, can lower costs to $2,100-$2,200 per 40ft for west coast shipments, depending on carrier and volume ratios—for example, one full-priced FAK container for every four shipped at a discounted contract rate.
To counteract falling rates, carriers are ramping up blank sailing programs on the transpacific, with 9 blank sailings announced for next week to maintain capacity discipline and defend current price floors. The trend is accelerating: Sea-Intelligence reports that blanked capacity on the Asia-North America west coast for the week starting April 28 has more than doubled to 28%, while on the east coast, blanked capacity for the week starting May 5 has surged to 42%—levels typically seen only after major holidays like Chinese New Year. Over the next five weeks, Drewry estimates that 9% of scheduled sailings on east-west mainline routes will be blanked, with 56% of cancellations concentrated on
