ContainerSignal
freight-ratescapacityblank-sailingstranspacificasia-europered-seadrewryxenetasurcharges

The transpacific premium is mostly a capacity decision

By Toni Tan · · 10 min read

Container shipping’s two main east-west trades are priced as if they belong to different markets. On 16 October, Xeneta put Far East to US East Coast spot at US$11,495 per FEU and Far East to North Europe at US$3,568 per FEU, a spread of more than three times. In the same week, carriers were removing capacity from the expensive trade and announcing rate increases on the cheap one.

What happened

Drewry’s World Container Index rose 3% to US$4,485 per 40ft container in its assessment for 15 October 2026, ending 13 consecutive weekly declines on Asia-Europe. Shanghai to Rotterdam rose 6% to US$3,522 per 40ft and Shanghai to Genoa rose 7% to US$3,945, Drewry reports. Shanghai to Los Angeles rose 3% to US$7,884, while Shanghai to New York fell 1% to US$10,075.

The Asia-Europe rise followed announcements, not a change in demand. Hapag-Lloyd posted freight all kinds rates of US$4,200 per 40ft to North Europe and US$4,600 to the Mediterranean from 19 October. CMA CGM posted US$4,600 and US$4,700, and MSC US$4,500 to both. MSC and CMA CGM gave the rates an end date of 31 October. Forwarders told The Loadstar that the increases had already been revised down and that demand was flat. MSC separately said it would blank two Britannia sailings on Asia-North Europe in weeks 45 and 46.

On the other trade, carriers moved the opposite way. Xeneta recorded 58,200 TEU blanked on Far East to US West Coast and 35,500 TEU on Far East to US East Coast in the week covered by its 16 October update, while spot rates held at US$8,296 and US$11,495 per FEU. “When spot rates on US trades are still up triple-digit percentages compared to pre-Hormuz crisis in February, carriers would normally be adding capacity rather than blanking sailings,” Emily Stausbøll, Xeneta’s senior shipping analyst, wrote. In her reading, “this looks like the behavior of carriers who don’t believe the market will hold.”

The capacity returning to the market is going to Asia-Europe, and it is arriving through routing rather than new ships. Xeneta counted 448,273 TEU of scheduled weekly capacity crossing Bab el-Mandeb in at least one direction on 5 October, double the level on 27 August and 48% of the 930,679 TEU offered in August 2023, before carriers began diverting around the Cape of Good Hope.

The security picture is the main thing that could reverse that. FreightWaves reported on 14 October that Houthi missile and drone attacks on Saudi airports and energy infrastructure had sharply escalated the Saudi-Houthi conflict, with Riyadh’s King Khalid International Airport closed until at least 17 October. No broad closure of Bab el-Mandeb has been confirmed, but the attacks follow attempts since July to close the strait to Saudi-linked traffic.

The data

Index (provider)Trade laneUnitPeriodLevelChange
World Container Index (Drewry)Composite, eight east-west lanesper 40ftAssessment of 15 Oct 2026US$4,485+3% week on week
World Container Index (Drewry)Shanghai to Rotterdamper 40ftAssessment of 15 Oct 2026US$3,522+6% week on week
World Container Index (Drewry)Shanghai to Genoaper 40ftAssessment of 15 Oct 2026US$3,945+7% week on week
World Container Index (Drewry)Shanghai to Los Angelesper 40ftAssessment of 15 Oct 2026US$7,884+3% week on week
World Container Index (Drewry)Shanghai to New Yorkper 40ftAssessment of 15 Oct 2026US$10,075-1% week on week
Market average spot (Xeneta)Far East to North Europeper FEU16 Oct 2026US$3,568+2.5% since 9 Oct
Market average spot (Xeneta)Far East to US West Coastper FEU16 Oct 2026US$8,296-0.2% since 9 Oct
Market average spot (Xeneta)Far East to US East Coastper FEU16 Oct 2026US$11,495-0.1% since 9 Oct

The two providers sample different port pairs, which is why a lane can rise 3% in one dataset and fall 0.2% in the other in the same week. The direction agrees, and the levels are consistent with a large transpacific premium, a difference our explainer on container freight rate indexes sets out.

Three capacity numbers frame the point: 448,273 TEU a week crossing Bab el-Mandeb against 930,679 TEU before the diversions; 93,700 TEU blanked on the transpacific in the week to 16 October; and two blank sailings announced for Asia-Europe next week, down from six this week, which Drewry reads as more effective capacity on the route. The interrupted 13-week decline is covered in the 15 October market update.

What the evidence suggests

The interpretation here is that the spread measures where capacity is scarce, not where demand is strongest.

The volume data does not describe a US market three times the size of Europe’s. Long Beach moved 997,177 TEU in September, 25% more than a year earlier and a monthly record, but its year-to-date volume is up 3.9%, WorldCargo News reports. The National Retail Federation expects full-year 2026 US ocean imports to finish 1.4% above 2025, according to FreightWaves. A monthly record driven by shippers adjusting to high diesel costs, Panama Canal restrictions and the prospect of a new US-China trade deal is not a demand boom, and a 1.4% annual increase cannot explain a price gap of more than three times.

The second part of the interpretation is about intent. A carrier that expected the transpacific to hold would add capacity to the trade with the highest rates. Blanking 93,700 TEU instead is the behaviour of a line protecting a price it expects to be tested. The Asia-Europe FAK postings point the same way: a price announced for 19 October, given a 31 October expiry and already revised down by forwarders, is a reference for 2027 contract talks, not proof of a tightening market.

The supply mechanics explain why the two trades are defended differently. Asia-Europe has a capacity tap that routing can open: every service that returns to Suez shortens the round voyage and releases effective capacity without a new ship, and that tap has doubled since late August to 448,273 TEU a week, still less than half the August 2023 level. The transpacific has less of that release available, so its supply is managed by subtraction. One trade is defended by announcement, the other by blank sailings.

What the data cannot separate is how much of the transpacific level is demand, how much is congestion and how much is carrier discipline. Congestion at key Asian ports was easing in mid-October as holiday cargo volumes fell, though Shanghai berthing delays persisted, the Journal of Commerce reported. Easing congestion releases capacity and argues for lower rates, but the backlog itself has been part of what supported rates.

The counter-case

The strongest objection is that the transpacific premium is earned rather than manufactured. US import volumes are running near record levels, and container ships are among the vessels attacked in the Strait of Hormuz, so the security premium behind the February rate level has not gone away. On that reading the spread reflects demand, transit risk and insurance, not a carrier forecast, and it can persist for as long as the security situation does.

A second objection is seasonal. Blanking after Golden Week is normal, and 93,700 TEU across two coasts may be an ordinary fourth-quarter programme rather than a signal. Without the comparable programme from October 2025, this piece cannot show that the current blanking is unusually large.

A third concerns which leg gives way. If Houthi attacks reverse the Red Sea return, Asia-Europe capacity tightens and the spread narrows from the European side. That would close the gap without confirming the claim that US rates are the weaker leg.

What would resolve the disagreement is the next two index prints. If the spread narrows because Shanghai to Los Angeles and Shanghai to New York fall faster than Shanghai to Rotterdam, the capacity reading is supported. If it narrows because Asia-Europe rises, the security premium is doing the work, and the argument here is wrong about which trade carries the risk.

What to watch

  • Drewry’s index for 22 and 29 October: whether Shanghai to Los Angeles and Shanghai to New York fall faster than Shanghai to Rotterdam.
  • Whether Far East to US West Coast breaks below US$8,000 per FEU and Far East to US East Coast below US$11,000 in Xeneta’s weekly average.
  • Drewry’s cancelled sailings tracker for weeks 44 to 47. A rising transpacific share of those cancellations would suggest defence rather than routine scheduling.
  • Xeneta’s weekly Bab el-Mandeb capacity. A print above 448,273 TEU confirms the Red Sea return is still adding effective capacity.
  • Whether the 19 October FAK rates survive their 31 October end date, or are revised down again first.

Sources

Related reading

Asia-Europe rates fall a thirteenth week as transpacific eases

Drewry's World Container Index fell 2% to US$4,351 per 40ft in the week to 8 October, Asia-Europe's thirteenth weekly decline, as transpacific rates eased.

ContainerSignal Daily: Rates rebound 3% as Asia-Europe slide ends

Drewry's World Container Index rose 3% to US$4,485 per 40ft in the week to 15 October as Asia-Europe rates ended 13 straight weeks of decline.

Asia-Europe spot rates extend their fall as Transpacific gains stall

Drewry's World Container Index fell 1% to US$4,434 per 40ft in the week to 1 October, Asia-Europe's twelfth weekly decline, while Transpacific gains slowed.