DREWRY, a leading British shipping analytics company, is calling on /shippers to take advantage of the situation and renegotiate the terms of their contracts, as container freight rate indices record a drop to the lowest levels of the last 20 months and spot prices on key routes are retreating even below the viability threshold of the market’s largest players.
As the British company notes, the strong inflationary pressures that skyrocketed freight rates over the last two years are now showing signs of retreat and after consecutive price hikes due to the Red Sea crisis, high advance payments, and tariff burdens, /shippers are now in a position to negotiate more favorable terms for their 2026 contracts.
Drewry suggests that new agreements incorporate longer payment times,
increased commitments for service quality, but also clauses limiting additional
charges, such as detention and demurrage.
These two specific charges relate to additional costs associated with the time of using the containers and directly affect the final transport cost.
According to freight brokers, demurrage concerns the delay in receiving the container within the port.
If a container remains beyond the predetermined “free time” – the free storage time -, then the consignee is charged daily fees.
The goal of this policy is to prevent congestion in ports and ensure the rapid transit of cargo.
In contrast, detention concerns the delay in returning the container from the customer to the shipping company.
When the container remains outside the port for more days than agreed, the customer pays for the extra time of its use.
Simultaneously, it proposes the inclusion of price revision clauses, so that shippers can adjust their contracts in case of intense market fluctuations.
According to data from the British analysis service, the East-West Contract Rate Index -which reflects the average prices paid by more than 100 large multinational shippers on 17 key routes- recorded in September the first annual drop since July 2024.
Although the decrease was limited -3% on an annual basis- it signals the reversal of the upward trend and foreshadows a larger correction in the 2026 contracts.
Experts emphasize that prices, despite the downturn, remain about 25% higher than the pre-pandemic levels of 2019.
However, the scale is now tipping towards the shipper customers, who are gaining an advantage in negotiations.
This translates into better terms for costs, volume commitments, space availability, and service quality.
The fall in demand for sea freight since the President of the United States Donald Trump imposed a series of new tariffs on trade partners, earlier this year, contributed to the reduction of sea container freight rates to the lowest levels since January 2024, threatening the profits of large shipping companies, such as Maersk and Hapag-Lloyd.
The Drewry World Container Index (WCI), which tracks the “spot” prices outside of contracts for transporting a 40-foot container on the main shipping lines, fell to the lowest level in the last 20 months, at $1,669 per
40-foot container.
The price for the Shanghai – Los Angeles route, the busiest container shipping trade route, decreased by 58% compared to last year, reaching $2,196, according to Drewry.
Both these prices are lower than the $2,200 that major shipowners, such as Maersk and Hapag-Lloyd, need to generate profits, according to Jefferies shipping analyst, Omar Nokta.
“Prices have fallen below the cost-covering threshold of top shipping companies for the first time since late 2023,” Nokta stated.
Asia-Europe spot prices fell again this week, marking a decline for the 10th consecutive week, after they decreased by 7% ($1,613 per 40-foot container) on the Shanghai-Rotterdam route and by 9% ($1,804 per 40-foot container) on the Shanghai-Genoa route.
Drewry’s Container Forecaster predicts that the supply-demand balance will weaken in the coming quarters, which will cause a shrinkage in spot prices.
