Container rates are falling. The cost has moved to the rail leg

Drewry’s assessment for 29 October put the World Container Index at US$4,429 per 40ft container, down 3% and the first decline after two weekly gains. The fall was almost entirely a transpacific event: Shanghai to Los Angeles dropped 6% to US$7,514 per 40ft and Shanghai to New York 5% to US$9,631, while Shanghai to Rotterdam edged up 1% to US$3,686 and Shanghai to Genoa held at US$4,151, according to Drewry.

Three days earlier, on 26 October, 35,688 import containers were sitting at Los Angeles and Long Beach waiting for on-dock trains. Of those, 10,562 had been on the terminals for at least nine days, The Dwell’s compilation of the ports’ daily rail reports showed. The figures count containers rather than twenty-foot equivalent units.

A falling ocean rate and a queue for trains are not a contradiction. They measure two different legs of the same journey, and only one of them appears in the index. The argument here is that the binding constraint on US import cargo has moved from the water to the inland network, and that a port-to-port spot rate now tells a shipper less about total cost than it did when ships were the scarce asset.

What happened

The ocean leg loosened on the transpacific. Drewry attributed the composite decline to that lane, and its commentary points at demand rather than capacity. It cited a National Retail Federation forecast that US ocean import volumes will fall 11% month on month in November, and said it expects rates to decline again next week. Announced transpacific blank sailings rose from five to six, which Drewry read as tight capacity rather than withdrawal.

The inland leg tightened at the same time. At Los Angeles, 8,133 of the 19,626 containers awaiting trains had waited nine days or longer, a 41.4% share. At Long Beach the figure was 2,429 of 16,062, or 15.1%. Average rail-container dwell across the complex rose to 7.19 days in September from 6.75 in August, and dwell for truck-destined containers to 3.18 days from 2.95, according to Pacific Merchant Shipping Association data. Both ports handled record monthly volumes in September: Los Angeles about 1.04 million TEU, Long Beach 997,177 TEU.

National rail volumes confirm the direction, not a boom. US rail traffic rose 7.8% in the week ended 24 October against the same week a year earlier, with intermodal up 11.3% and carloads up 3.6%, Association of American Railroads data showed. Over the first 42 weeks of 2026 intermodal is up 4.7% and total traffic 3.8%. The weekly print is peak season; the cumulative one is not.

Inland capacity is being added, slowly. Georgia Ports formally opened the US$134 million Gainesville Inland Port on 29 October, after operations began in May, with Norfolk Southern service to Savannah five days a week. The authority expects the terminal to shift 26,000 containers from road to rail in its first year and has designed it for 200,000 a year at full build-out, FreightWaves reported. It has not disclosed actual volume since opening. Separately, the Journal of Commerce reported that Schneider is switching its East Coast rail partner to Norfolk Southern.

Labour risk has been deferred, not removed. The Pacific Maritime Association said the deadline for a strike at the two ports had been pushed to 4 November, with talks continuing under assistance from the Federal Mediation and Conciliation Service, the Journal of Commerce reported.

The data

Index (provider)	Trade lane	Unit	Period	Level	Change	Source
World Container Index (Drewry)	Composite, eight east-west lanes	per 40ft	Week to 29 Oct 2026	US$4,429	-3% week on week	Drewry
World Container Index (Drewry)	Shanghai to Los Angeles	per 40ft	Week to 29 Oct 2026	US$7,514	-6% week on week	Drewry
World Container Index (Drewry)	Shanghai to New York	per 40ft	Week to 29 Oct 2026	US$9,631	-5% week on week	Drewry
World Container Index (Drewry)	Shanghai to Rotterdam	per 40ft	Week to 29 Oct 2026	US$3,686	+1% week on week	Drewry
World Container Index (Drewry)	Shanghai to Genoa	per 40ft	Week to 29 Oct 2026	US$4,151	Unchanged	Drewry

The rail numbers carry different units and are not comparable with the rate figures. The backlog is a one-day stock of containers, not an average wait. PMSA’s dwell figures are monthly averages for the whole complex, and they rose in a month when the ports set volume records.

One more number matters. Drewry reported that 62 vessels transited the Suez Canal last week, the highest weekly level this year, which is the capacity side of the half-finished return to the Red Sea route under way since August. That is an Asia-Europe story, not a transpacific one, and it explains why the composite’s weakness and the Asia-Europe lanes’ firmness come from different forces.

What the evidence suggests

The 3% decline is a demand signal from one trade lane dressed as a market-wide print. The transpacific fell while Rotterdam rose and Genoa held, so the index is averaging a demand-driven correction against a capacity-managed Asia-Europe market. On Asia-Europe, announced blank sailings fell from eight this week to four next, which is the opposite of withdrawal: capacity is being returned. Drewry’s own expectation there is stability, not decline.

The inland data says something the rate indexes are not built to capture. Intermodal traffic is up 4.7% year to date, which does not describe a volume surge, yet 35,688 containers were waiting for trains in late October. If volume alone explained the queue, a mid single-digit rise in national intermodal would not produce a nine-day tail for 41% of Los Angeles rail cargo. The reports point at equipment: C.H. Robinson identified Southern California railcar shortages in its October market update, and empty-container repositioning was complicating equipment flows while truck-destined boxes moved relatively normally.

That distinction has a practical consequence. Port-to-port indexes measure assessed spot rates for the ocean leg, as the guide to container freight rate indexes sets out, and they exclude terminal dwell, detention, rail availability and the cost of a missed inland connection. When the ocean leg has slack and the inland leg does not, the index understates door-to-door cost and the direction it is moving in.

One inference follows. Los Angeles and Long Beach share the same two Class I railroads, so a 41.4% long-wait share in one port against 15.1% in the other cannot be explained by railcar supply alone. It is consistent with terminal differences in on-dock rail capacity, the constraint the Pier B project at Long Beach is designed to change. That is an inference from two published ratios, not a measurement, and neither port has published a cause.

What the data cannot separate is why the cargo arrived in those quantities. Three explanations fit: shippers pulled orders forward ahead of the 4 November deadline and tariff timing, railcar and westbound asset availability lagged the import mix, and the Suez return is bunching arrivals as ships reach terminals earlier than the Africa-route schedules they replaced, a schedule reliability problem, not a capacity one. The first would clear on its own; the other two are operational and clear more slowly.

The counter-case

The strongest objection comes from the ports themselves, which say this is already being fixed without structural change. Los Angeles executive director Gene Seroka put rail dwell at “about five-plus” days and stable over 90 days, with truck dwell near three and a half days, and said westbound train assets arriving at the ports had risen six, eight and tenfold over the previous three weeks. Long Beach chief executive Noel Hacegaba said average rail time remained under five days, with smaller inland hubs worse than major destinations. If equipment has already been repositioned, the queue is a scheduling problem being solved, not a capacity wall.

Demand cuts the same way. An 11% month-on-month fall in November US import volumes would drain the backlog faster than any operational fix, and the peak season that produced September’s record volumes is ending. On that reading the queue is a peak artifact and the 3% decline is the accurate signal.

Both are testable. If PMSA’s October figures show rail dwell back toward the August level while import volumes stay near September’s, the operational argument fails and the volume explanation is sufficient. If dwell stays above seven days as volumes fall, the constraint is real.

What to watch

• PMSA’s October dwell release, due in early November: rail dwell against September’s 7.19 days, truck dwell against 3.18 days.
• The Dwell’s daily on-dock rail inventory: whether the 35,688 containers of 26 October fall materially while monthly volumes stay near record levels, which would separate a volume story from an equipment one.
• AAR weekly intermodal, against the 11.3% weekly print and the 4.7% year-to-date rate. A weekly figure decaying toward the cumulative rate confirms the peak has passed.
• The 4 November labour deadline at both ports. A stoppage would invalidate the comparison, because a stopped terminal changes dwell for reasons unrelated to rail.
• Drewry’s next assessment: whether four announced Asia-Europe blank sailings hold Rotterdam at US$3,686 while the transpacific falls again. That split tests whether the composite is measuring a demand correction or a network-wide softening.