Low demolition levels and uncertain forecasts for the medium-long term. Just as the prospects for a return to full operation for the Suez Canal seem to be moving away again for the future, with Maersk and Hapag-Lloyd recently rushing to communicate that there is currently no set date for a return along the Red Sea route, several analysts predict new market imbalances for 2026 due to a forecast of weak growth in transport demand, which will settle around 3%.
It is clear that for the new year carriers will be forced to accelerate the decommissioning of older ships if they want to address the problem of overcapacity, which will increase to a greater extent than demand (+3.6%). Data from Linerlytica shows that there are almost 1,700 container ships over twenty years old. In total, 4.4 million TEUs are at stake: 13.3% of the total capacity offered by the global fleet.
The carriers, which in the third quarter of the year recorded a combined EBIT of 5.12 billion dollars, a sharp decline compared to the 17.06 billion recorded in the same period the previous year, have important decisions to make for the coming year.
The drop in rates recorded by Drewry last week, the first after six consecutive weeks of increases, has once again sent the market into fibrillation, although – as Sea Intelligence points out in its latest weekly report – profitability remains well above pre-pandemic 2019 levels.
While financial results have weakened, operational data indicates resilience. “Globally transported volumes grew for six of the seven carriers that published their quarterly reports, suggesting that the influx of new ship deliveries and the reworking of service networks have allowed shipping lines to profitably absorb longer transit times in the Red Sea,” says the CEO of the British consultancy firm, Alan Murphy.
The lengthening of the ton-miles index resulting from the need to circumnavigate Africa has certainly supported freight rates over the last two years, “the question we must ask ourselves now is whether liners will be able to keep freight rates at the same levels of profitability also for 2026,” wonders Xeneta’s senior analyst, Emily Stausbøll, who highlights how carriers have so far been able to diversify their strategies, adapting them to market dynamics and various routes.
The Danish analysis company has developed a focus on this topic, highlighting how from the Far East to the United States shipping companies have adopted a more aggressive approach towards direct fronthaul connections to the States, targeting market share rather than rates.
Xeneta notes that in November, albeit in a context characterized by a decline in transport demand, the weekly capacity offered on routes connecting the Far East to the US East Coast increased by 35% year-on-year, settling around a four-week average of 183,000 TEUs.
It is therefore not surprising that on this trade freight rates have decreased by 53% compared to November 2024, settling at an average of $2,684 per FEU.
On the Asia-West Coast USA trade, the offered capacity remained in line with the previous year’s values, falling by just 2% year-on-year. In this case as well, the offered capacity, which settled in November around 324 thousand TEU, outpaced transport demand (which contracted by 9% in August and September), pushing rates down, which plummeted by 55% year-on-year.
Different, however, is the strategy adopted on the services connecting the Far East and Europe, where carriers have preferred to give greater priority to maintaining rates.
On November 25, the four-week moving average for capacity offered on this trade was 290,100 TEU, down from the peak of 320,600 TEU last September. This was enough to cause average rates to increase by 40% since October 14, settling around an average of $2,350 per FEU.
The same logic, however, does not seem to apply to traffic from the Far East to the Mediterranean, where average spot rates increased (+37% since mid-October) in direct proportion to the increase in offered capacity, which in November reached 739,000 TEU, the highest level since July. In this case, high transport demand allowed shipping companies to absorb the offered capacity.
The transatlantic trade, on the other hand, continues to represent for shipping companies a sort of safe haven or parking area for their ships. Along the route connecting Northern Europe to the US East Coast, offered capacity has increased by over 50% since January 1, 2020, and this despite market demand remaining around the same levels as 2020.
This would demonstrate that the level of capacity deployed by carriers on this traffic is influenced by factors that go beyond the analysis of cyclical demand. The Transatlantic trade, which often goes unnoticed compared to other fronthaul trades, is in fact fundamental to the global strategy of shipping companies. When ocean supply chains are under pressure – as during the Covid-19 or Red Sea crises – capacity is removed from the transatlantic and deployed on more profitable trades. Conversely, when there is excess capacity (as at this time) carriers bring ships back to the transatlantic to protect freight rates on other trades.
Whatever strategies carriers are adopting today along the various routes, one thing is certain: “Shipping companies will do everything they can to secure favorable contracts from their customers and maximize volumes and rates,” says Emily Stausboll again.
Time is a gentleman. But not always and not for everyone. Long-term forecasts do not play in favor of the current market equilibria, and the liners know this.
However much it has been continuously postponed, it is a matter of months before the Suez Canal becomes operational again.
“If more and more ships eventually return to the Red Sea passages, the effective demand in teu-miles will decrease further, favoring a misalignment between demand and supply and laying the groundwork for a strong market correction,” Lynerlitica founder Hua Joo Tan told Lloyd’s List.
In short, in 2026 the wind could turn in favor of shippers, given the overcapacity of hold space, but the shipping companies will not stand idly by.
