3 Reasons 2027’s Market Will Be Great for Shippers with Downward Freight Rate Pressure

2026 started as a promising year for shippers when it came to freight rates. A combination of severe overcapacity and decreased demand plummeted massively bloated 2025 freight rates. Then shippers got whiplash when freight rates spiked again with the combination of the Iran War and front-loading of cargo to beat a new expected round of tariffs. Now, 2027 is setting up to be a much better market for shippers with three major factors combining to put downward pressure on freight rates.

Chaotic – often manufactured – spikes pushed falling freight rates back up in 2026. Carriers going as slowly as possible in their return to Red Sea and Suez Canal shipping helped them artificially and significantly reduce massive overcapacity, high war and oil related surcharges greatly increased freight rates, and the Supreme Court ruling against the Trump Administration’s IEEPA authorization for sweeping tariffs notably help alter traditional shipping demand cycles. 2027 should be a year of rebalancing that will bring freight rates down and give leverage to shippers.

Shipping returning to the Red Sea, oil deflation, and an enormous amount of even more capacity heading to the international shipping market should combine to create incredible downward pressure on freight rates.

Below, we go into those three factors, as well as the risk factors that shippers should be aware of that can shift things back into carriers’ favor, raising freight rates again.

Factor 1: Return to the Red Sea

Carriers are expected to be forced to about fully return to shipping through the Suez Canal by the end of this year, according to a Journal of Commerce (JOC) article by Greg Knowler.

We’ve already seen some services through the major shipping gateway return. Knowler’s article shares the Sea-Intelligence Maritime Analysis outlook that those returns in service will create competitive pressure to force carriers to speed their return to the Suez Canal.

I’ve written several times in Universal Cargo’s blog that carriers do not have incentive to rush back to Red Sea shipping. Carriers were absolutely right to stop shipping through the Gulf of Arden and Red Sea when Iran-backed Houthi rebels began attacking ships. However, rerouting away from those waters didn’t just protect sailors’ lives along with vessels and cargo. It saved carriers from a very real overcapacity crisis that was set to put massive downward pressure on freight rates.

Instead of a crisis that could have caused carriers massive losses through unhealthily low freight rates, the Red Sea crisis helped carriers skyrocket freight rates as they needed to utilize more capacity over longer routes to deliver the same amount of cargo around the world. Without adding a single ship to the waters, returning to the Red Sea, and thus the Suez Canal, would mean a significant increase of capacity, or supply in the supply-demand equation in the industry. Transit times, not having to go down and around Africa in the Cape of Good Hope detour, will decrease by 10 to 14 days, getting ships ready to move more goods much faster than we’ve seen over the last couple years.

Bottom line, in 2027, the Suez Canal should be fully open for business, increasing shipping capacity and putting downward pressure on freight rates.

Factor 2: Oil Deflation

Oil-related surcharges and freight rate increases have significantly increased shipping costs for importers and exporters since the start of the Iran War.

When the Iran War first hit, oil prices per barrel spiked. They’ve come down quite a bit from their peak, but oil prices have been volatile, reacting to the ebbs and flows of the news around the conflict ever since. At the writing of this article, oil prices are around $90 to $96 a barrel, which is near a five-week high after Iran attacked two oil tankers in the Strait of Hormuz. However, simultaneously, 17 million barrels of oil were reported transited through the waterway on Monday while even Reuters, which isn’t particularly Trump-Administration-friendly, reports the administration’s blockade is successfully stalling Iranian oil exports.

This looks like the high-water mark for oil. There should be cooling with the Strait of Hormuz and military action between the U.S. and Iran in 2027, but even without that oil prices should be dropping.

The Trump Administration made an enormous crude oil deal with Venezuela that should start significantly increasing oil supply into the world market next year. Meanwhile, continued record-breaking drilling in the U.S. should likewise add oil volume, lowering the ceiling on the energy source’s prices in the global market.

Thus, in 2027, carriers will lose a cause for significant freight rate increases they’ve been able to impose in 2026, and shipping costs for importers and exporters should decrease.

Factor 3: Incoming Container Ship Tsunami

A wave of new-order container ships are set to bring more capacity to the international shipping industry in 2027. This is in addition to the capacity increase the return to Red Sea shipping will bring.

The completion of the huge number of container ships ordered during the post-pandemic shipping boom are hitting the waters in late 2026, throughout 2027, and into 2028.

According to Linerlytica and Alphaliner data, the global containership order book reached a record 13.1 million TEU, which represents a staggering 39% of the entire existing active global fleet.

Alphaliner reports, as shared in a Kuehne & Nagel article, that a total of 1,000 new-build container vessels, equating to 8.5 million TEU of capacity, are scheduled to hit the water across 2027 and 2028.

A capacity crisis has been on the way for carriers for a long time. In 2027, it looks like it will finally arrive, creating enormous downward pressure on freight rates and creating great opportunity for shippers next year.

Counter Factors: What Could Go Wrong for Shippers

While an initial forecast for 2027 looks good for shippers, there are factors that could keep freight rates from dropping in their favor.

– Capacity Management with Blank Sailings

Carriers have become extremely good at utilizing their alliances to coordinate blank (cancelled) sailings to manage capacity. While carriers used to fall into rate wars, reducing freight rates to unhealthily low levels for them, since the pandemic, they’ve mastered artificially lowering capacity to keep demand from dipping so far below capacity to cause steep or prolonged freight rate drops.

While cracks have appeared in the carrier alliances that dominate the industry through increased legal scrutiny and alliance reshuffling, carriers still seem adept at coordinating blank sailings and avoiding freight rate wars in recent years. This could keep freight rates from falling at rates the market would naturally dictate.

Still, mega ships entering the industry as hidden capacity in the market is reopened from the return to the Red Sea is a lot of supply increase to neutralize through blank sailings. Before the post-pandemic era, this kind of capacity has caused individual carriers to break ranks and chase volume, triggering price wars. The cracks already beginning to show in the carrier alliances could be put under more stress and grow into full breaks in 2027.

– Continued Tariff Uncertainty

Front-loading and shipping surges to beat new tariffs and potential tariff hikes continue to create demand uncertainty in 2027. Expect continued trade disputes and escalating retaliatory tariffs next year. The results of which could include permanently altered supply chains, possibly forcing shippers into expensive and/or inefficient alternative routes.

However, each trade dispute or escalation of tariffs is localized to specific countries and routes. Increased tariffs to one country can increase sourcing opportunities from another. Increased U.S. production and increased tariffs tend to also lower shipping demand, decreasing freight rates. In some cases, decreased freight rates can more than make up for increased tariffs.

If tariff uncertainty decreases demand while capacity increases as it should in 2027, the combination could result in big freight rate drops. Shippers should be ready to capitalize.

– Unpredictable Disruptions

Port and shipping hub disruptions always ripple into larger freight rate hikes. Carriers never let a good disruption go to waste. Hurricanes, tsunamis, political conflicts and wars, port labor strife… things happen every year that cause ports or waterways to get congested or shut down. When these things happen, capacity tightens and carriers issue various surcharges and rate increases.

It’s guaranteed something unexpected will happen at some point during 2027. When it does, freight rate volatility will come with it. If it’s something with the significance of the Red Sea attacks or the Iran War, large and lingering freight rate increases will come with it. If the events are smaller and more localized, carriers will issue rate increases but have a much harder time maintaining them.

Conclusion

2027 is shaping up to be favorable for shippers because of likely overcapacity and lower oil prices. Those who manage their supply chains well should be able to reap strong rewards for their businesses’ bottom lines.

There are still the risks that come with this volatile industry that could cause freight rates to turn against shippers. However, importers and exporters who are looking ahead should have good opportunities to pounce next year.