News / Overcapacity looms for ocean trades – with more blanked sailings inevitable

ID 33113435 | Antwerp Container Port © VanderWolfImages | Dreamstime.com

Notwithstanding the possible effects of the US tariffs on global container trades, the box lines continue to inject more capacity into shipping services, although demand appears to be waning.

According to new analysis from Sea-Intelligence, capacity on the headhaul westbound Asia-Europe trades since Chinese New Year has grown by a far greater amount that is normal for the time of year, potentially explaining why spot freight rates have declined so severely in recent weeks.

“Container freight rates have a strong seasonal tendency to weaken in the period following Chinese New Year,” said Sea-Intelligence chief executive Alan Murphy.

“In 2025, however, the decline in spot rates is significantly more negative than what can be explained by just seasonality.

“This could be the result of an aggressive commercial price war between shipping lines, potentially due to the switchover to the new alliances, a weakening of the supply/demand balance, or a combination of both,” he added.

The analyst has calculated that, in the eight weeks since the beginning of Chinese New Year, average capacity on the Asia-Europe trades across all carriers in 2025 is some 27% higher than in the eight weeks that followed the holiday in 2024.

Meanwhile, apart from a one-week hiatus at the beginning of March, following the introduction of a set of GRIs [general rate increases] by carriers, spot rates on both Asia-North Europe and Asia-Mediterranean routes have been in continual decline since the turn of the year.

“Especially for Asia-Europe, it is clear that a highly significant capacity growth is a key parameter in explaining the current spot rate weakness,” said Mr Murphy. “If the shipping lines are to be successful with the GRIs they have already announced for April, they will have to blank more scheduled sailings.,”

However, new volume data from February, produced by Container Trade Statistics, suggests volumes are also beginning to weaken, after remaining surprisingly strong for much of last year, which is likely to make the need to blank further sailings more pressing for carriers.

CTS data showed global shipped volumes in February stood at 13.1m teu, representing a 13.6% decrease from January and a 0.7% year-on-year decline.

In terms of import traffic, CTS said “all regions experienced a pullback” during February, with the steepest import declines seen in North America, where they dropped 17.4% month on month. However, year-on-year, North American imports were still up marginally, by 2%.

“This sharp decline is largely due to the predictable withdrawal in Far East exports, which is further exacerbated by the effects of US import duty tariffs, inevitably slowing trade,” CTS noted,

Meanwhile, in Europe, imports fell 18.7% month on month and by 4% year on year. This compared with a month-on-month decline of 4.5% between January and February last year, “indicating that other factors beyond the Golden Week effect contributed to the larger decline observed in 2025”.

With the weak trading conditions now expected to exacerbated by the tariff announcements, Sea-Intelligence’s provisional 3.2% forecast for global volume growth this year – which matches current GDP forecasts – is clearly threatened, and with that the potential for widespread overcapacity will increase.

“In 2009, during the financial crisis, we saw global demand decline 9% year on year,” said Sea-Intelligence.

“Whether the tariff war becomes as severe as the financial crisis is still entirely unknown, but even if the impact is half that of the financial crisis, this would tip the global supply/demand balance away from a strong 2025 peak and into overcapacity.”