Spot freight rates continued to slip for the 11th consecutive week, with prospects for a September rate rebound vanishing quickly as carriers continue to resist capacity cuts to match the drop in demand. Cargo booking volumes have fallen by between 5% to 20% in the last 2 weeks with the Transpacific, Asia-Europe and Latin America routes under heavy pressure.
The withdrawal of 11 US sanctioned ships has lifted the idle fleet to a 15 month high, but this has not eased the tight charter market. October could prove to be the turning point as carriers will need to make drastic capacity cuts by then to prevent a complete collapse in freight rates.
Intra-Asia rates have remained more resilient, with the interim results for the first half of 2025 clearly favouring carriers that are more focused on the intra-Asia sector. The shortage of charter tonnage and relatively small orderbook in the feeder sector have shielded the intra-Asia carriers from the severe rate cutting now appearing on the long haul tradelanes but it remains to be seen if the respite could last until the end of the year.
Johnson Leung
Ship scrapping in next 4 years needs to match total demolitions of the past 25 years
Only 12 containerships with a total capacity of 8,465 teu have been scrapped so far this year, with a further 6 ships lost at sea or converted to other usage. Notwithstanding the low level of vessel deletions recorded so far this year, a larger challenge lies ahead as the rapidly swelling orderbook will need to be balanced by a sharp increase in scrapping, with at least 4.5 million teu to be removed by 2030, equivalent to the cumulative capacity demolished in the last 25 years.
Register Free Trial
Weekly/Monthly Market Pulse: US$1,500/US$1,800 per year