Global container shipping rates have been on a steady decline for ten consecutive weeks, signaling a shift from earlier volatility to a more stabilized market. Drewry’s World Container Index dropped another 4% this week, landing at $2,250 per 40ft container. The tariff-fueled surge that drove rates higher earlier this year appears to have run its course.
The rollercoaster began in April with the announcement of new U.S. tariffs, which triggered a sharp rate spike from May into early June. However, prices began to plummet by mid-July, and while the pace of decline has since slowed, the downward trend continues.
Spot Rates Expected to Slide Further into 2026
Transpacific trade lanes took the hardest hit this week. Rates on the Shanghai–Los Angeles route fell 3% to $2,412/FEU, while Shanghai–New York dropped 5% to $3,463/FEU. Drewry attributes this to the end of an early peak season driven by U.S. retailers rushing to import goods. With the U.S. economy slowing and tariff costs rising, demand has softened significantly.
Asia–Europe routes also saw declines. Shanghai–Rotterdam rates slipped 6% to $2,973/FEU, and Shanghai–Genoa fell 3% to $2,978/FEU. Despite steady European demand and ongoing port congestion, an oversupply of vessel capacity continues to weigh heavily on rates. Drewry’s Container Forecaster predicts further spot rate declines in the second half of 2025, driven by a weakening supply-demand balance. The market’s trajectory will depend on potential new Trump-era tariffs and how carriers adjust capacity in response to U.S. penalties on Chinese vessels.
Tariffs, Overcapacity, and Fading Demand Add Pressure
The impact of tariff uncertainty is already evident at U.S. ports. The National Retail Federation’s Global Port Tracker projects a 5.6% drop in 2025 import volumes compared to last year. “Tariffs are raising consumer costs and squeezing small businesses,” said NRF Vice President Jonathan Gold. “What we need are trade deals that lower barriers—not higher ones.”
Port activity reflects the turbulent trade environment. U.S. ports handled 1.96 million TEU in June, an 8.4% year-over-year decline, followed by a projected 2.3 million TEU in July as retailers rushed to beat August tariffs. However, volumes are expected to drop sharply through the end of the year, with November forecasted at just 1.71 million TEU—the lowest since April 2023.
Ben Hackett, founder of Hackett Associates, described the tariff situation as “on-again, off-again,” creating challenges for shippers, importers, and consumers alike. With demand fading, capacity oversupplied, and tariff risks still looming, the container shipping market faces prolonged downward pressure.
©2025 Global Trade