Last week, statements by the Suez Canal Authority indicated that Maersk’s return to the Red Sea was imminent. Maersk quickly denied they had set a date, and now it appears all the excitement may have been mostly a misunderstanding, though there are signs that Maersk is at least dipping some toes back to the lane through third parties.
So a Red Sea rebound may not be coming as soon as it seemed a few days ago, but a return is likely still closer than it has been for the last two years. The resumption, whenever it occurs, will cause congestion at European hubs – where congested ports are leading some carriers to already adjust port call plans – during the transition back before releasing significant amounts of capacity back into rotation and adding downward pressure on rates once schedules normalize.
Even before a Red Sea reset, there are already signs of growing overcapacity in the market. This fleet growth even with Red Sea diversions still in place has meant lower container rates year on year for most of 2025.
Transpacific rates fell further to close November, with West Coast rates down 10% to $1,/FEU and East Coast rates easing 17% to $2,/FEU. These dips brought transpacific prices within a couple hundred dollars of year lows after climbing on mid-October and early November GRIs Demand is estimated to be at its lowest since early 2023, but supply side growth is also contributing to lower rates. Daily rates this week are trending up though, which could signal another GRI attempt to start December.
More aggressive capacity management on Asia – Europe lanes are likely responsible for carriers succeeding to maintain October and November GRIs on these trades. Prices were level last week at about $2,/FEU to Europe and $2,/FEU to the Mediterranean. Daily rates to the Mediterranean are up to about the $3,/FEU level so far this week suggesting a GRI push, though prices to Europe have stayed about level. New EU emissions surcharges will mean higher costs to carriers on these lanes that will start to be passed on to customers in January.
Severe storms in South East Asia last week disrupted ocean and air freight operations in countries including Sri Lanka, Thailand, Vietnam and Malaysia. Of these, Sri Lanka may have been the hardest hit, with delays reported at the Port of Colombo as services restart.
Also late last week, Airbus grounded 6,000 of its A320s for a critical software update with a hardware fix needed for about 1,000 of these aircraft. Most vessels were updated and returned to service over the weekend, with no significant delays reported yet. FedEx and UPS have grounded their MD11s following a deadly crash, and though FedEx anticipated a rapid inspection process, aircraft are taking longer than expected to get back in the air.
The US cancelled its de minimis exemptions over the summer driving a significant reshuffle of e-commerce air cargo volumes and capacity over the last few months. The EU has committed to revoking its de minimis rules by 2028, though it may do so as early as next year. The UK has now also decided to terminate the exception. But with a later target date of 2029, there is concern that an even stronger surge of e-comm goods could enter the country once de minimis to the other major markets close.
Freightos Air Index rates to Europe climbed 4% to $/kg out of China last week and were about level at $/kg out of South East Asia. China – N. America prices were level at $/kg last week but show signs of increases this week as peak season enters its home stretch. SEA – N. America rates are at about $/kg so far this week.
Judah Levine, Head of Research, Freightos Group
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