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Asia-Europe rates fall even as the container network stays tight

By Toni Tan · · 9 min read

Container spot rates on the main east-west lanes fell again in the week to 1 October, and the Asia-Europe trade has now declined for twelve consecutive weeks. On the same assessment day, Drewry’s intra-Asia composite index set another all-time high. The two readings are not contradictory. They measure different layers of the same network, and the layer that is short of capacity is not the one the headline index covers.

What happened

Three things were true at the start of October. Mainline pricing was still coming down. A large block of physical capacity was still sitting in port queues. And the trades that depend on transshipment and mid-size tonnage were pricing at or near record levels.

Drewry’s World Container Index fell 1% to US$4,434 per 40ft container in the week to 1 October, a second consecutive weekly decline, with Shanghai to Rotterdam down 2% at US$3,399 and Shanghai to Genoa down 3% at US$3,702. Drewry attributes the move to Golden Week factory closures and to more vessels transiting the Suez Canal, which is adding effective capacity to the trade. The composite covers eight east-west lanes, so it moves with the long-haul market rather than with any single route; our guide to container freight rate indexes sets out how a composite reading relates to the lanes beneath it.

At the same time, congestion is still consuming capacity. Roughly 12% of global containership capacity was absorbed by port congestion in early October, the highest in four years, according to C.H. Robinson’s October Edge Report (reported by gCaptain). Sea-Intelligence puts the figure at 8.5% of the fleet absorbed by delays, equivalent to about 3m TEU (via Splash 247). Both figures were carried in the 3 October briefing.

On intra-Asia, Drewry’s Intra-Asia Container Index rose 2% to US$1,518 per 40ft container on 1 October, an all-time high for the sixth consecutive week, and the index is up 212% year on year.

The data

Read lane by lane, with the period attached, the split is visible.

Asia to North Europe and the Mediterranean is falling. Drewry puts Shanghai to Rotterdam at US$3,399 per 40ft container and Shanghai to Genoa at US$3,702 in the week to 1 October, with Asia-Europe now down for 12 consecutive weeks. Xeneta’s market averages for the same week put Far East to North Europe at US$3,726 per FEU and Far East to the Mediterranean at US$4,105 per FEU, down 2.1% and 4.6% week on week.

Asia to the United States has flattened after its surge. Xeneta puts Far East to US West Coast at US$8,346 per FEU, up 1.4% in the week, and Far East to US East Coast at US$11,523 per FEU, up 0.7%, both well above the 28 February pre-Hormuz baseline, by 344% and 335% respectively. The spread between the two coasts is US$3,177 per FEU, against about US$772 before the crisis.

Intra-Asia is the tightest layer, and the prints are unambiguous. Shanghai to Singapore is US$2,073 per 40ft container and Shanghai to Tanjung Pelepas US$2,056, both up 4% on the week; Shanghai to Ho Chi Minh City is US$1,377, up 7%; Shanghai to Manila is US$1,062, up 7%. Shanghai to Jebel Ali, the Middle East lane, sits at US$8,662 per 40ft container.

The physical evidence matches the prices. Drewry recorded average waiting times of 82 hours at Shanghai and 56 hours at Ningbo in week 39. Braemar’s BOXi charter index reached a 52-week high of 315.59, with the broker describing an extremely tight supply situation and virtually no available post-panamax or panamax tonnage (via Splash 247); how container ships are sized covers the classes those terms describe.

Two supply-side readings point the other way. Suez Canal transits in week 39 ran 68% higher than the same week last year, releasing tonnage that Cape of Good Hope routings had absorbed, and Drewry counts 10 blank sailings announced for the coming week against 13 this week, with five on Asia-Europe against six. Sea-Intelligence’s figure of 1.5m TEU deployed on Asia-North Europe across four weeks around Golden Week is 27% higher year on year and 60% above pre-pandemic averages, but the analyst says bunching inflates that number rather than any deliberate capacity addition.

Cost is part of the intra-Asia story. Drewry notes that Brent crude has traded above US$100 per barrel since early September and that CMA CGM applied an emergency fuel surcharge of US$75 per TEU on its intra-regional lanes from 1 October.

What the evidence suggests

That the two layers price differently is interpretation, and the useful reading is that they measure different things rather than disagree.

The mainline market is being supplied and de-supplied at the same time. Cape routings are unwinding as Suez transits recover, blank sailings are thinning, Golden Week removed a week of Chinese demand, and an extended US-China trade truce may support a post-holiday rebound. Every one of those levers points to softer long-haul spot prices, which is what the WCI composite shows.

The hub-and-feeder layer behaves like a queueing market. Waiting times of 82 hours at Shanghai and 56 hours at Ningbo are not a demand signal; they are a physical constraint that consumes vessel capacity in the same way a blank sailing does, as our explainer on what is a blank sailing sets out. Carriers used blank sailings and port omissions to limit capacity on intra-Asia, according to Drewry, and containers displaced by those omissions reappear at the next hub down the chain. Mid-size tonnage is scarce because that is the tonnage this layer needs.

What the data cannot separate is how much of the Asia-Europe decline is demand and how much is capacity. Xeneta Chief Analyst Peter Sand says plainly that demand is not strong, which points to demand. Suez normalisation and Golden Week point to capacity. No single week’s print distinguishes them.

The same caution applies to the intra-Asia record. Part of it is scarcity and part is cost pass-through, since Brent above US$100 per barrel and an emergency surcharge of US$75 per TEU will lift any short-haul composite. Capacity, congestion, fuel and seasonality moved together in the same period, and these prints cannot be assigned to one of them.

The counter-case

The strongest honest objection to this argument is that falling mainline rates are what a loosening market looks like, and that the intra-Asia record is a composition effect rather than evidence of scarcity.

On that reading, the intra-Asia index is a short-haul, fuel-exposed market where a queue and a surcharge can lift prices, while the east-west lanes that drive carriers’ network economics are normalising from the Hormuz peak. Xeneta’s conclusion on 1 October was that the Far East to US market reached its post-Hormuz 2026 peak and will not collapse, and it projects US East Coast spot rates at US$6,000 to US$7,000 per FEU and US West Coast at US$4,500 to US$5,500 within three months. That is Peter Sand’s view, attributed to Xeneta, not a forecast of ours. If it holds, the divergence narrows as congestion clears and carries little signal about 2027.

What would resolve the argument is the behaviour of the two indexes once the Golden Week backlog clears, together with the US East Coast premium. A seventh consecutive intra-Asia record with Shanghai waiting times still above 80 hours would support the queueing reading. A first decline, shorter waits and a stabilising WCI composite would support the normalisation reading.

What to watch

  • The WCI print for the week to 9 October, the first full week after Golden Week, and then the print to 16 October: does the composite stop falling?
  • Whether the FAK increases carriers are introducing in the second half of October are implemented, rolled or abandoned. Drewry calls the outcome uncertain.
  • Drewry’s Intra-Asia Container Index: a seventh consecutive record or the first decline. Shanghai to Singapore and Shanghai to Tanjung Pelepas are the hub reads; Shanghai to Jebel Ali is the Middle East proxy.
  • Average waiting times at Shanghai and Ningbo against the 82 and 56 hours recorded in week 39.
  • Colombo, the other congested hub: Hapag-Lloyd has warned of two-to-three day waits with yard density above 130%, and The Loadstar reports sources divided on whether the pressure is easing. Watch whether those numbers fall.
  • Braemar’s BOXi index and whether post-panamax and panamax availability returns to the charter market.
  • Weekly Suez transit counts against 2025, since the unwinding of Cape rerouting is the largest single supply variable in this market.
  • OOCL’s China-Cambodia-Thailand Service, launching on 23 October with calls at Nansha, Shekou, Sihanoukville and Songkhla, as a small test of whether tight intra-Asia pricing draws new capacity.

Sources

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