International Freight Rates Keep Falling, Liner Companies Suspend 100+ Sailings Urgently to Stabilize the Market

The international container shipping market has seen a sharp price drop recently. Spot freight rates on major east-west routes have fallen for weeks in a row. This has led liner companies to adjust shipping capacity on a large scale. According to the latest report from Drewry, major global shipping alliances will cancel a total of 125 sailings in the coming weeks to stop international freight rates from falling further. This move shows how serious the current supply-demand imbalance is in the market. It also reflects the fragility of the global supply chain, which is hit by both seasonal fluctuations and structural changes.

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Usually, the period before the Spring Festival is a small peak for Chinese exporters to ship goods in bulk. A large number of consumer goods, electronic products and home supplies need to be shipped before the festival to meet the spring sales demand in European and American markets. But this traditional peak season did not arrive as expected in 2026. Drewry’s analysis shows that since January this year, cargo volumes on major routes from Asia to North America and Europe have been much lower than expected. The pile-up of empty containers at some ports has become worse, and shippers are not willing to book shipping space. Weak demand has directly reduced the bargaining power of shipping companies, which in turn has pushed international freight rates down continuously.

Take the SCFI as an example. By early February, its composite index had dropped nearly 28% from the December 2025 high. The rate on the US West Coast route fell by more than 30%, and the European route also dropped over 25%. This round of falling international freight rates is not an isolated incident, but the result of multiple factors combined. On one hand, although inflation pressure in major European and American economies has eased, consumer confidence is still weak. Retailers hold high inventories, so their restocking pace has slowed down a lot. On the other hand, geopolitical risks and uncertain trade policies have held back the release of medium and long-term orders, further weakening the support for maritime cargo volumes.

Facing the double pressure of lower revenue and higher empty load rates, liner companies have taken quick action. Besides canceling 125 sailings, many leading shipping companies have announced temporary route mergers, slowed down ship speeds to cut fuel consumption, and delayed new ship delivery plans. Alliance members such as Maersk, MSC and CMA CGM all said they will prioritize stabilizing international freight rates in the short term, rather than expanding market share. This "retreat to advance" strategy aims to rebuild supply-demand balance by actively reducing effective shipping capacity, thus supporting the bottoming of international freight rates.

It is worth noting that this adjustment of international freight rates also exposes the deep structural conflicts in the current international shipping market. In the past two years, driven by post-pandemic recovery and unexpected events such as the Red Sea crisis, international freight rates once soared to a record high. This encouraged shipping companies to place a large number of new ship orders. However, as regional geopolitical conflicts ease and supply chains recover gradually, the newly added shipping capacity will be released in a concentrated way in the next 12 to 18 months. This may bring a new round of impact to the already weak market. If demand fails to pick up at the same time, international freight rates may face a longer period of low volatility.

In addition, the sharp fluctuations of international freight rates also pose challenges to small and medium-sized shippers and cross-border e-commerce enterprises. High freight costs greatly squeezed their profit margins in 2024. Now, the rapid drop in freight rates brings cost benefits, but it also increases logistics uncertainty due to unstable booking and disordered shipping schedules. Industry experts suggest that these enterprises should strengthen long-term contract cooperation with shipping companies and make rational use of risk management tools such as freight rate futures to deal with the cyclical fluctuations of international freight rates.

Looking ahead, the stabilization and recovery of international freight rates mainly depend on the substantial recovery of global consumer demand and the trend of geopolitical situations. If the European and American economies achieve a soft landing in the middle of the year, together with the optimization of China’s manufacturing export structure, it is expected to drive a mild rebound in cargo volumes in the second half of the year. But before that, liner companies will continue to strictly control shipping capacity, and international freight rates are likely to fluctuate repeatedly at a low level.