Shipping Volatility Intensifies: Rate Wars, Capacity Cuts, and South Asia's Growing Bottlenecks

Global container shipping is facing a capacity crunch as carriers ramp up blank sailings to counter plunging freight rates, yet the market remains under pressure. The latest Shanghai Containerized Freight Index (SCFI) shows steep declines, with China-North Europe rates falling 16% to $1,805/TEU and transpacific rates also weakening. A fierce price war has driven some carriers to quote rates up to 20% below competitors, while attempts at March general rate increases (GRIs) face strong market resistance.

Despite aggressive capacity management, blank sailings on Far East-North Europe are set to surge by 449% by late February yet demand remains sluggish, keeping slot utilization below 95%. With vessel congestion easing at Chinese and South Korean ports, returning capacity is further straining pricing. As uncertainty looms, shippers must prioritize supply chain resilience and contract strategies to navigate ongoing volatility.

Bangladesh shippers, too, are grappling with new challenges as Gemini Cooperation’s hub-and-spoke model bypasses direct feeder services for the country. Instead, cargo remains dependent on transshipment through Colombo - Sri Lanka and Tanjung Pelepas - Malaysia, compounding congestion risks at already strained ports. Congestion at Chittagong Port is also mounting following a labor strike that has left 18 vessels stranded and a backlog of 38,000 TEU. With Ramadan approaching, reduced working hours could prolong the crisis, leading to further shipment delays and supply chain disruptions in South Asia.

In the coming weeks, carriers will likely face continued pressure to adjust strategies, while shippers navigate a volatile market. Between rate and capacity fluctuations, and shifting trade strategies the industry remains in flux, requiring agile responses and strategic planning to weather the challenges ahead.

For more details on these developments, you may refer to the articles below.

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