Market volatility sets the tone for ocean carriers

Uncertainty now dominates the container shipping landscape, industry executives warn, and few expect a quick return to calm. Bill Rooney, executive vice president at Kuehne + Nagel, told attendees at the Agriculture Transportation Coalition Conference that the disruption is far from over and companies should remain prepared for further shocks.

“Don’t take your crash helmets off,” said Bill Rooney, executive vice president at Kuehne + Nagel.

Geopolitical conflicts weighing on global trade

Multiple geopolitical crises are compounding commercial uncertainty and reshaping trading routes. Shipping lines and shippers face risks from a series of state and non-state conflicts that have practical effects on routing and schedules.

• Man-made famine conditions in Gaza and the wider humanitarian crisis
• Escalating tensions involving Israel, Hamas and Iran
• The ongoing Russian war against Ukraine
• Repeated Houthi rebel attacks on vessels transiting the Red Sea, prompting many carriers to reroute around the Cape of Good Hope

Tariff policy and trade negotiations alter shipping incentives

Shifting U.S. tariff announcements and international trade negotiations have produced stops-and-starts that disrupted planning. The Trump administration announced tariff changes that produced a series of deadlines and temporary pauses; for example, a U.S.–China tariff truce was recently extended by 90 days to November 10.

Earlier in the year, an April 2 tariff announcement generated an April 9 "load-by" rush, and a number of tariffs officially took effect on August 7. An executive order on August 1 also raised tariffs for several countries, and U.S. trade deals with the EU, Japan, South Korea and Vietnam have simultaneously reduced some duties, creating complex and sometimes contradictory signals for importers.

Peak season timing and the frontloading effect

The traditional container shipping peak that typically runs from about week 28 to week 36 has been disrupted by pandemic-era upheaval, equipment shortages, port congestion, reroutings and tariff volatility. This year the expectation of U.S. tariff changes brought peak loads forward, particularly on trans-Pacific lanes.

Many shippers hurried to move cargo between the April 2 announcement and the April 9 load-by deadline to avoid higher duties, producing an unusually early surge in volumes. Florencia Serra, a Maersk North America spokesperson, said trans-Pacific import bookings strengthened in June and that Maersk restored vessel capacity that had been reduced earlier in the year to meet rising demand. By July, Maersk reported most of the tariff-driven backlog had cleared.

Carrier financials and capacity strains

Some carriers reported strong first-half results driven by the frontloaded demand. Hapag-Lloyd said its liner shipping segment rose by $10.4 billion in the first half of 2025, a gain it attributed mainly to an 11% increase in transport volumes. CEO Rolf Habben Jansen noted that new U.S. tariff policy produced volatile demand and freight-rate movements in the first half of 2025 and that tariff uncertainty had dampened U.S. imports and softened what would otherwise have been a stronger peak season.

Yet the surge put intense pressure on ships, ports and equipment. Alphaliner senior analyst Stefan Verberckmoes observed that carriers operated nearly their entire fleets during the rush; only nine vessels were scrapped, and those were very small units in the 320 TEU to 800 TEU range. Verberckmoes added that some carriers are effectively losing capacity to port waiting times, citing Hapag-Lloyd’s estimate of about a 2% capacity loss because of delays.

Shipbuilding pipeline and policy headwinds

The global order book has reached record levels, raising concerns about future overcapacity. Verberckmoes said the order book stands at roughly ten million TEU, with about seven million TEU scheduled for delivery over the next three years and additional newbuilds already ordered for 2030 delivery.

China accounted for a dominant share of new orders in 2024, with 70.65% of container ship orders by volume. At the same time the U.S. administration has proposed heavy levies on Chinese-built ships calling at U.S. ports from mid-October, a move that MSC warned would have "very, very significant" consequences for service to the United States. Drewry forecasts around 250,000 TEU of new capacity entering the market each quarter, and Philip Damas of Drewry notes that roughly 190 new containerships were expected to be delivered during calendar 2026.

Rates, indices and the post-peak trajectory

Freight rates surged during the frontloading period from May through early June but have moderated as the cargo surge subsided. Drewry’s World Container Index shows that spot rates from Asia to Los Angeles and New York have fallen by about half since the start of the year as the pre-tariff surge eased. By the third week of August the Drewry index recorded a 4% week-on-week decline to $2,250 per 40-foot container, marking the tenth consecutive weekly fall.

Freightos reported steady West Coast trans-Pacific prices around $2,300 per FEU for several weeks in August, East Coast rates declining to about $3,950 per FEU, and Asia–North Europe rates roughly $3,400 per FEU since early July. Eytan Buchman, CMO at Freightos, said lanes facing imminent tariff rises such as Vietnam and India to Long Beach showed little movement, with Indonesia up modestly.

How carriers plan to manage capacity and service

As demand softens after the early peak, analysts expect carriers to use targeted blank sailings and adjust services to stabilise rates. Drewry’s Philip Damas predicts carriers will cut capacity and downgrade service levels where necessary, then try to offset lower base freight rates by increasing surcharges. He also highlights ongoing port congestion and Red Sea disruptions as factors that could absorb some structural overcapacity.

Industry participants say carriers have already been trimming deployable capacity rather than adding it in order to support rates, and they are offering more flexible port calls to chase demand. With new regulatory costs and proposed fees—such as levies on Chinese-built ships—shippers face additional procurement and operational risks.

Practical advice for importers navigating the turbulence

For U.S. importers, the priority at the negotiating table has shifted toward securing capacity discipline and schedule reliability. Freightos’ Buchman advises shippers to push for contract clauses that guarantee space and lock in surcharge terms, since blank sailings can appear quickly and the market’s rules are changing even if headline rates are relatively calm.

Philip Damas warns that the era of low operational risk and predictable transport contracts is over and urges shippers to prepare for new surcharges, regulatory fees and varying service levels as carriers seek to manage a fragile market.