Tradelanes / Westbound transatlantic capacity settles after a volatile Q1

Photo: VesselFinder

The normally staid transatlantic trade has recently experienced a tumultuous period of uncharacteristically volatile pricing, by its standards at least, largely as result of capacity injections and subsequent removals.

Throughout last year, and up to the outbreak of the US/Israel-Iran conflict, volumes have been flat, tempered by tariffs, while rates continually weakened.

Meanwhile, the Container Trades Statistics Price Index has been in steady decline since the beginning of 2025. The Europe-North America route’s price index was 102 in January 2025, and had fallen to 88 by December.

January this year saw it at 84 and it further declined to 83 in February, before capacity reductions managed to stabilise prices at 83 in March.

Source: Container Trades Statistics

Meanwhile, volumes in Q1 26 remained weak, with some 40,000 teu fewer shipped in the first three months compared with Q1 25, representing a market decline of just over 3%.

Source: Container Trades Statistics

The weakness of earnings on the transatlantic was one of the chief reasons cited by Hapag-Lloyd last week when it reported a $174m EBIT loss in its liner activities.

“[We had] significant exposure to the Atlantic freight, which was very weak in the first quarter, in particular. And as a consequence of that we have had to take some capacity out because it was simply no longer possible to provide those services at a reasonable cost,” chief executive Rolf Habben Jansen told financial analysts.

In April, it closed its CES transatlantic service, on which Maersk had been a slot charterer. The string deployed seven ships with an average capacity of 2,700 teu and connected Northern Europe with Saint John, Philadelphia, and Port Everglades, along with Moin, Santa Marta, and Cartagena in the Caribbean.

According to Xeneta’s eeSea liner database, at this point last year the number of monthly transatlantic services stood at 55, with 44 being direct services into North America from North Europe and the Mediterranean, with the remaining 11 made up of Europe-Latin America and Europe-Oceania services that included wayport calls in North America.

Last month, that tally was down to 50 services a month, with pure transatlantic services standing at 38, meaning carriers have withdrawn six services over the past 12 months alone.

Spot rate recovery

However, since the onset of April, spot rates on the trade have staged a surprising recovery, driven by two factors – reduced capacity, and the imposition of new emergency fuel surcharges following the outbreak of the Iran conflict, which under Federal Maritime Commission regulations had to wait 30 days until being applied, along with opportunistic peak seasons surcharges

And not just in quoted spot rates, but actual rates paid, as shown by the latest data from NYSHEX, which manages the New York Freight Index. Last week saw its transatlantic westbound rate grow 12% on the previous week, to finish at $2,253 per 40ft, compared with the low point of the past 12 months, which was 7 November, when the reading stood at $1,342 per 40ft.

Source: NYSHEX

Meanwhile, forwarders on the trade are now closely watching vessel deployment to ascertain how spot rates may develop up to the peak season.

“I did notice one of the Premier Alliance sailings coming into to Europe is not going back to Asia, but will move to the transatlantic, it was the ONE Satisfaction,” one forwarder told The Loadstar.

“The additions to that Liberty [service] should have an impact on rates, and I expect us to get close to somewhere near the levels we saw in February this year, allowing for higher BAF etc. but it will just take a while to get there,” he said.

The 13,700 teu ONE Satisfaction was removed from the Premier Alliance FE3/MSC Condor Asia-Europe service and deployed to the Ocean Alliance’s transatlantic Liberty service, where ONE has moved from being a slot charterer to a tonnage provider.

It has also meant Liberty now has seven ships compared with six before, according to eeSea.

The ONE Hammersmith, previously on the Premier Alliance’s FE1 Asia-Europe service, was also assigned to Liberty at the beginning of May, but it replaced the Ever Faith which left the string in early March.

Throughout 2025, monthly proforma westbound transatlantic capacity remained remarkably stable, at between 240,000 teu and 250,000 teu of slot capacity, with actual offered capacity ranging between 230,000 teu and 240,000 teu a month.

That changed in April, when proforma capacity dropped to 220,000 teu and offered capacity amounted to 210,000 teu, according to eeSea.

According to the latest data from Linerlytica, there is 462,412 teu of capacity across 78 ships deployed on the Mediterranean-North America trade, which is up 4.4% on last month, and 3.4% over the same point last year; while on the North Europe-North America trade, capacity is down 9.8% year on year and 3% month on month, to currently stand at 544,194 teu across 93 vessels.

The recent behaviour of spot rates suggests this probably about the right level, but now that those rates are well into profit-making territory for carriers, the key question is how disciplined they will remain in withholding further capacity additions.