Red ink is forecast to splatter across the balance sheets of containerlines in the final quarter of the year despite the Shanghai Containerized Freight Index (SCFI) snapping its more than two-month decline today.
The declines in spot indices have brought rates – particularly on the transpacific – to near pre-Red Sea crisis levels, with many analysts now forecasting that liners will have tough final quarters of the year.
“The last time we saw rates this low prior to escalation in the Red Sea, carriers were posting big losses. Carriers may still make big bucks in 2025 overall, but this profit will have been made during the volatility earlier in the year, with Q4 returning to loss-making in isolation,” commented Peter Sand, chief analyst at Xeneta, a freight rate platform.
“While capacity discipline, if any, could provide temporary support for freight rates and even trigger minor recoveries, the persistent demand-supply imbalance will push rates down eventually in the rest of the year,” HSBC forecast in a freight market update.
Analysts at Linerlytica, an Asia-based consultancy, reckon prospects for a September rate rebound are vanishing quickly as carriers continue to resist capacity cuts to match the drop in demand.
Cargo booking volumes have fallen by between 5% to 20% in the last two weeks, according to Linerlytica, with the transpacific, Asia-Europe and Latin America routes under “heavy pressure”.
John McCown, whose company Blue Alpha Capital provides regular container updates, is warning of a dire end to the year on the transpacific. McCown describes the National Retail Federation’s projection of a 5.6% decrease in total inbound volume for 2025 as “a reasonable estimate” for US containerised imports. Given that year-to-date volume is up 3.6% through July, this forecast indicates a severe 17.5% decline for the final five months of 2025.
With the transpacific looking the weakest of the main tradelanes, carriers are tipped by one leading expert to take action sooner or later to stem losses.
Seasonally, the Pacific trade usually declines in October as demand drops after Chinese Golden Week.
Lars Jensen, who heads up container consultancy Vespucci Maritime, said that if that seasonality holds up, the Pacific demand and spot rates are prone to decline further, and shippers should be prepared for a raft of blank sailings in Q4.
Sea-Intelligence, a Danish liner consultancy, is forecasting supply will grow between 5-8% this year and the next three years, and there is no indication that global container demand will keep up with this.
“We should expect endemic overcapacity for the coming years, which should lead to spot rates moving to marginal cost levels,” Sea-Intelligence cautioned in a recent market report.
