Cancellations of routes at COVID rates bring crisis back to the container market.
The container transport sector has been in crisis recently, with shipping companies canceling routes at a rate we saw during the pandemic, in a desperate attempt to sustain freight rates which have come under strong pressure.
On one hand, the fear of tariffs and on the other, low demand from the United States have caused chain reactions throughout the entire global supply chain, with shipping companies’ profit margins being under steam and now falling below the zero limit on several key routes.
Despite this, most of them continue to prioritize market share over profitability.
According to new data from project44, 67 routes from China to the US and 71 in the opposite direction have been canceled this month, a number that even exceeds the levels of the COVID era!
“Companies are ‘erasing’ routes with an intensity we haven’t seen since the early days of the pandemic,” said Bart De Muynck, head of Better Supply Chains. “The difference is that this time it’s not a reaction to a crisis, but an effort to maintain the stability of freight rates in a market disrupted by tariffs.”
Since the beginning of the year, canceled routes have skyrocketed on all major routes connected to the US, with the US West Coast – Southeast Asia route reaching even 75%!
Imports from China have seen a decrease for five consecutive months, while exports for nine. Since Donald Trump returned to power, US-China trade has changed radically: imports have retreated by 27% on an annual basis, while exports have recorded a 42% drop.
Shipping companies are reacting with the only tool they have left, that of capacity.
Route cancellations (blank sailings) have become their primary weapon to sustain freight rates, as the uncertainty caused by tariffs disrupts schedules and limits demand.
Despite the scale of the disruption, supply standards remain impressively stable. Most shippers have not yet substantially moved their production outside China, they are simply shifting the timing of their shipments, trying to avoid the peak tariff periods.
Linerlytica commented this week that shipping companies are fighting a tough battle under adverse conditions in order to restore freight rate levels.
“Far East freight rates continue to be under pressure due to reduced market activity, because of China’s Golden Week holidays,” the company reported. “Although shipping companies are pushing for freight rate increases from October 15th, the return of most regular services after the Golden Week cancellations does not offer substantial support to this effort.”
Finally, according to the investment bank Jefferies, freight rates have fallen below the profitability threshold even for the most efficient companies, for the first time since the end of 2023. The bank warns that low spot market freight rates could negatively affect 2026 contract negotiations.
Seeing all this crisis in the container market couldn’t help but awaken in each of us memories from the coronavirus era, when everything hit rock bottom and a little later skyrocketed to the heights…
Shipping has proven many times that after every crisis it finds its way. Let’s hope this time there will be a market stabilization at levels that the average consumer can withstand.
