Trans-Pacific Carriers Prevent Rate Collapse

16 Dec Trans-Pacific Carriers Prevent Rate Collapse

With import volumes expected to decline over the next 60 days, shipping organisations will find it increasingly difficult to prevent spot rates from crashing.

Even though there is a significant drop in new bookings due to shipper uncertainty, shipping organisations intend to keep capacity elevated, with tonnage from Asia to the US West Coast set to increase almost 13% year over year in January to nearly reach a 37-month high.

This increased volume comes ahead of Lunar New Year in mid-February, however at this point in time there is doubt that the historical shipping rush before Chinese factories slow or cease production for the celebrations will have much impact.

The spot rate from China to the US West Coast hit its 2025 low point early October at $1,300 per FEU, and in the period since, shipping entities have been able to gravitate around this price point, increasing to $2,220 in early November before dropping to $1,500 per FEU over the recent weeks, and managing to avoid a sub $1300 market by resisting old urges to slash freight-all-kinds (FAK) rates.

As an alternative, they have been implementing general rate increases (GRIs) that have successfully prevented spot and FAK rates from collapsing, whilst simultaneously protecting their individual market shares by offering bullet rates to their largest customers to protect their market share. In addition, rather than announcing a large $1,000 GRI on the first and 15th of each month, shipping companies are introducing rapid-fire GRIs almost weekly.

With the soft market expected to continue into early 2026, the need to maintain some semblance of a pricing floor will become increasingly important as trans-Pacific service contract negotiations intensify through the northern hemisphere winter.

FOLLOW US FOR THE LATEST NEWS!

Simply click here to follow our LinkedIn Company Page to stay up-to-date with the latest industry news that may impact your business.