Container shipping lines are accelerating capacity cuts in a bid to stabilise freight markets, as Golden Week factory closures in China approach and spot rates continue to slide across major trade lanes.
Following weeks of hesitation, carriers have now confirmed significant blank sailings to absorb weaker demand. On the Asia–North America routes, around 14% of planned sailings have been cancelled to the West Coast and a similar 14% to the East Coast. Asia–North Europe is seeing close to 17% of sailings withdrawn, with the Asia–Mediterranean trade reduced by roughly 17% as well. This brings cancellations back in line with typical Golden Week levels.
The pressure on spot markets has intensified in recent weeks. Transpacific rates have dropped sharply, with the West Coast and East Coast both recording double-digit weekly declines. Asia–Europe and Asia–Mediterranean services also lost ground, slipping by high single-digit percentages. Current levels are edging back toward pre-Red Sea crisis benchmarks, where carriers previously struggled to maintain profitability.
Analysts warn that rates are approaching breakeven territory, with cost bases across the industry significantly higher than in 2019. While levels remain above the lows of late 2023, the downward momentum is expected to persist through to year-end, before any seasonal lift ahead of the Lunar New Year.
Capacity Adds to Pressure
The underlying challenge remains excess capacity. The global order book now represents nearly one-third of the active fleet, with over a million TEUs of new-buildings scheduled to enter service before year-end. With scrapping almost absent, the tonnage overhang continues to build.
At the same time, the Asia–Europe network is actually short of nearly 40 vessels needed to maintain full weekly schedules. With the charter market unable to provide adequate large ships, some carriers are struggling to balance services even as supply growth accelerates. Extended diversions around Africa have absorbed some tonnage, but not enough to restore the supply–demand balance.
Looking ahead, the slowdown in US imports is expected to intensify during the fourth quarter, compounding pressure on carriers. Even if geopolitical disruptions persist, analysts argue that diversions and longer transit times cannot fully offset oversupply. This lack of pricing control suggests further erosion in rates unless the carriers take drastic action, or stronger demand emerges.
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