The global shipping market remains highly volatile due to geopolitical and economic uncertainties, including the Ukraine-Russia war and fluctuating US-China tariffs. Transpacific spot rates fell sharply in late February, prompting a surge in blank sailings to stabilise prices.

Meanwhile, new US tariff charges on Chinese shipping could shift capacity between the United States and Europe. In the Asia-Europe trade, spot rates have dropped nearly 50% since January following the Red Sea reopening, although blank sailings suggest prices may not return to 2023 levels soon.

Key Points

-              The Trump effect continues – a chaotic picture regarding the outcome of the Ukraine-Russia war and a ramping up (and changing every week) of US/China tariffs alongside a raft of global tariffs by the US administration provides ample confusion as to where spot and contract rates are headed

-              JOC TPM 2025 kicks off at the close of the month, with spot rates ostensibly weaker than the bulk of 2024 following the resumption of Suez transits, however Asia-US West Coast rates have remained remarkably strong in the run up to the transpacific contract negotiation period.

-              The return of blank sailings as carriers attempt to stem the rout of spot prices, with 75,700 TEU of shipping capacity blanked by late February (an increase of 449%). Blanked sailings aims to improve capacity utilisation/support rates.

Asia-US

It has been a tale of two halves, with spot rates on FBX01 Asia-USWC (alongside futures rates) remaining strong in the first half of February. From 3 February to 18 February, rates pitched down slightly by 4%. However, the second half of February saw spot rates capitulate, down 16% in two days and closing the month down 26.57% for the full month.

FBX01 Asia-US West Coast and FBX03 Asia-US East Coast spreads (the premium to ship to the US East Coast versus the US West Coast from Asia) has also closed up dramatically, with FBX03 Asia-US East Coast spot rates collapsing on 18 February and closing the month down 32.98%. Whilst some softness in the US East Coast rates was expected on the resolution of continual threats by the International Longshoreman’s Association (ILA), the premium into the USEC vs the USWC is now the lowest it has been since 2017.

Wild swings in spot rates have largely been reflected by futures rates, with FBX01 rolling front month futures shedding value slightly ahead of the FBX index drop on 18 February, coming off of 2025 highs in late January and pricing a consistent discount to spot rates (backwardation). This is indication of spot rates still remaining extremely elevated to their 2023 levels pre-Red Sea closure and the route continues to attract buying interest, particularly in Q3 and Q4 of this year at a discount, slightly behind the spot price.

Wild swings in spot rates have largely been reflected by futures rates, with FBX01 rolling front month futures shedding value slightly ahead of the FBX index drop on 18 February, coming off of 2025 highs in late January and pricing a consistent discount to spot rates (backwardation). This is indication of spot rates still remaining extremely elevated to their 2023 levels pre-Red Sea closure and the route continues to attract buying interest, particularly in Q3 and Q4 of this year at a discount, slightly behind the spot price.

FBX03 also picked up similar interest, however the collapse of the FBX01/FBX03 spread has encouraged caution the route as volatility and price action falls more closely in line with FBX03.

In terms of the impact of tariffs and the impending USTR charge for Chinese tonnage shipping into the United States, this has yet to be realised in prices, with (depending on vessel size) the charge impacting 40ft container rates anywhere from $100 to $800/FEU.

Tariffs put potential pressure on demand out of China (a clear attempt to nearshore production and the appetites of US consumers away from China), although this may just be outweighed by the inflation of the price of goods and shipping. Tariffs and charges of tonnage may also push Chinese shipping towards North Europe (increasing capacity to North Europe and decreasing capacity into the US) and conversely pull other tonnage towards the US (decreasing capacity into North Europe and pushing it to the US).

Asia-Europe

Price action into North Europe and the Mediterranean has been far more progressive and substantial, and an immediate effect of the re-opening of the Red Sea and the tenuous Gaza/Israel peace deal.

Since its 2025 high on 9 January, spot rates have declined just shy of 50%, washing out February futures positions, however providing a new baseline for BCOs and end-users that wish to hedge using futures at much better value than earlier in the year. Index-linked contracting will also start to yield benefit for BCOs and carriers alike, with spot rates sitting behind long-term contract prices yet remaining sensitive to an ever-developing and largely unpredictable Asia-Europe container market.

Since its 2025 high on 9 January, spot rates have declined just shy of 50%, washing out February futures positions, however providing a new baseline for BCOs and end-users that wish to hedge using futures at much better value than earlier in the year. Index-linked contracting will also start to yield benefit for BCOs and carriers alike, with spot rates sitting behind long-term contract prices yet remaining sensitive to an ever-developing and largely unpredictable Asia-Europe container market.

Futures prices on FBX11 have stepped down week on week, with FBX11 futures already pricing well ahead of spot price moves with a solid degree of accuracy. Rolling front month futures are down approximately 13% and the full FBX11 Cal26 (2026 annual contract) down approximately 30%.

Asia-Europe/Med trades will also feel the impact of the potential shift in capacity following the potential implementation of charges on Chinese shipping into the United States, with the Europe route taking on the larger vessels in the global fleet. Meanwhile, blank sailing returns as a means to stem spot rate declines and address potential fleet utilisation issues have risen slightly.

Largely speaking these blank sailings have not seen a huge impact, although sudden support in the FBX11 spot price in late February (spot rates recovering and holding just above $3,000/FEU) could be an indication that spot rates will not fall through to their 2023 levels any time soon.

About Peter Stallion, Freight and Energy Derivatives, Braemar

Peter Stallion heads up the Container Freight and Cross-commodity desks at Futures brokerage Braemar Securities Ltd - a part of Braemar Shipbroking. He started his career in air freight chartering, and helped launch FBX-settled Container FFAs, and has a passion for emerging risk management markets and the logistics industry.


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