Demand and capacity mismatch on U.S. container trades
- Last update: 12/13/2025
- 3 min read
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- Business
The ongoing mismatch between supply and demand is causing a decline in container rates on U.S. trade routes, as ocean carriers deploy additional vessels into a market with weak demand. As of December 11, spot rates for shipments from Asia to the U.S. West Coast decreased by 2%, or $33 per forty-foot equivalent unit (FEU), reaching $1,861 per FEU, according to an update from market analyst Xeneta. This decrease follows a brief period of price recovery, highlighting a softer short-term pricing outlook.
Rates have fallen by approximately 22%, or $511 per FEU, since November 11, signaling a significant reduction in the pricing power that carriers once had. On the Asia-U.S. East Coast route, weekly rates saw a slight dip of 1.5%, or $41 per FEU, dropping to $2,709 per FEU, as the earlier rate increases plateaued. Month-over-month, rates have decreased by nearly 9%, or $257 per FEU, reflecting a noticeable correction in the market despite relatively minor weekly fluctuations.
"The fundamentals of supply and demand on key trades are not aligning right now, which means something has to adjust," said Peter Sand, Chief Analyst at Xeneta. "Spot rates remain stable even though available capacity is increasing, especially on routes from the Far East to the U.S. East Coast, North Europe, and the Mediterranean."
Carriers are expected to push for additional rate hikes in mid-December, which could lead to a slight price increase. However, this upward trend is likely to be short-lived due to the mounting pressure from growing supply. The impact of higher capacity will be most pronounced on U.S. routes, where demand is relatively weaker compared to European trades.
Capacity on the Asia-U.S. West Coast route increased by 1.7%, or 5,300 twenty-foot equivalent units (TEUs), in the latest week, with no signs of supply reduction. In fact, indicators suggest that more capacity will be added in the coming weeks. Compared to the previous month, capacity was up by 0.4%, or 1,300 TEUs. Shippers are expected to benefit from an increased and stable supply of space, which has resulted in lower rates.
For Asia-U.S. East Coast services, capacity surged by 10% week-on-week, reaching 17,400 TEUs, indicating a strong capacity build-up that is pushing spot rates downward. Month-over-month, capacity increased by 16%, or 26,300 TEUs, adding further downward pressure on prices.
There are also emerging signs that container ships are gradually returning to the Red Sea region, as evidenced by CMA CGM's Indamex service now transiting the Suez Canal for both fronthaul and backhaul voyages. This will contribute to further downward pressure on rates, particularly for trades involving the Far East, U.S. East Coast, and Europe that pass through the Suez Canal.
Analysts estimate that up to 2 million TEUs in annual capacity may return to the Red Sea-Suez Canal route once major carriers realign their schedules following a transition period.
As of December 11, spot rates for shipments from North Europe to the U.S. East Coast remained relatively stable, settling at $1,571 per FEU, down just 0.1%, or $2 per FEU, as capacity decreased by 0.7% week-on-week. On a monthly basis, rates increased by 0.3%, or $5 per FEU, maintaining a more stable balance between supply and demand compared to the volatile trans-Pacific market. Overall, capacity fell by 0.7%, or 400 TEUs, while monthly levels dropped by 6-7%, or 3,600 TEUs, as carriers reduced space availability since mid-November. Rates have stabilized as a result of the improved supply-demand balance.
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Riley Thompson
Riley Thompson is a journalist specializing in politics and social movements. Experienced in investigative reporting and producing analytical publications.
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