This week, global shipping rates for containers dropped sharply, erasing most of the gains from a brief rally in January. Carriers are finding it hard to keep prices steady due to weak demand and ongoing geopolitical issues.

The Drewry World Container Index fell by 4%, reaching $2,445 for a 40-foot container. This drop was mainly driven by decreases in the important Transpacific and Asia-Europe trade routes. This change follows a strong increase last week, when the index rose 16% to $2,557.

Transpacific routes experienced the largest declines. The spot rate for shipping from Shanghai to New York dropped by 10% to $3,568 per container, while the rate from Shanghai to Los Angeles decreased by 7% to $2,909. Even with the upcoming factory closures in China for the New Year in mid-February, which usually push rates up as shippers rush to send cargo ahead of the holiday, rates continued to weaken.

According to Drewry, "Carriers could not maintain rates due to weak demand," indicating that the previous week’s price increases were not sustainable and were rejected by the market.

Rates on Asia-Europe routes also softened, with the price from Shanghai to Rotterdam falling by 3% to $2,763 per container and from Shanghai to Genoa down by 1% to $3,839. The uncertainty in the Red Sea contributes to this pressure, as shipping companies have paused plans to resume transits due to "growing protests in Iran and the risk of direct U.S. military involvement," as reported by Drewry.

This volatility highlights the unstable condition of the container market as 2026 starts. Recently, Maersk announced that it would permanently restart its trans-Suez route for its MECL service, but most carriers are still very cautious. During the week ending January 11, traffic around the Cape of Good Hope surged to 203 voyages, more than double the number from the previous week.

Philip Damas from Drewry mentioned, "The return to the Suez Canal is one of this year's key factors affecting capacity, freight rates, and transit times," and he expects carriers to proceed carefully while keeping an eye on insurance costs, competitor actions, and port congestion risks.

With impending U.S.-China trade measures and unresolved security risks in the Red Sea, the container market is likely to face continued challenges in the coming months.