Freightos Baltic: Ocean rates tumble as post-Lunar New Year demand evaporates

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Global container markets have shifted abruptly into a correction, with spot rates across major trade lanes surrendering recent gains faster than historical norms. The pre-Lunar New Year holiday rush, which typically buoys pricing through early February, has dissolved into a demand lull, sending Asia–US West Coast rates plunging 21% to approximately $1,900/FEU—levels not seen since early December. 

This rapid reversion suggests that the seasonal peak was more muted than anticipated. Unlike previous years where backlogs sustained rate strength, the current market is characterised by a swift return to pre-peak baselines. The outlook for US imports remains soft; the National Retail Federation projects March volumes will dip 5% month on month, with Q1 demand expected to contract 7% year on year as retailers prioritize inventory caution over restocking. 

Operational friction persists despite the demand drop. While US hubs have largely recovered from recent winter storms, inland rail terminals are still grappling with residual backlogs. In Europe, severe weather in the Western Mediterranean and the Bay of Biscay disrupted port operations and vessel transits late last week. Although conditions are improving, carriers warn that schedule reliability remains compromised, creating pockets of congestion even as booking pressure eases. 

On the Asia–Europe trade, rates have cooled significantly. Prices to Northern Europe fell 8% to around $2,700/FEU, while Mediterranean rates slid 9% to $3,700/FEU. Despite the current softness, carriers are attempting to establish a floor, with several lines announcing General Rate Increases (GRIs) for March in anticipation of a post-holiday volume rebound. 

The structural imbalance between record volumes and declining carrier revenue is becoming increasingly evident. Major carriers, including Hapag-Lloyd and Maersk, reported earnings drops for the previous year, highlighting the dampening effect of aggressive fleet expansion. Maersk’s forecast for 2026 remains wide-ranging—projecting a result between a $1 billion loss and a $1 billion profit—underscoring that profitability now hinges largely on geopolitical variables, specifically the potential return of traffic to the Red Sea. 

Trade policy continues to inject volatility into the forward outlook. President Trump signed executive orders this week codifying tariff reductions for India while simultaneously granting new authorities to impose punitive levies on nations trading with Iran or Cuba. Elsewhere, tensions are rising in Panama, where Hutchinson Ports is seeking arbitration over concession invalidations, prompting reports of retaliatory pauses on development projects by Chinese state-owned enterprises.

Written by: Aiman Haikal