Shippers Can Catch Some Falling Freight Rates Right Now

Ocean freight rates in the international shipping industry are classically volatile. However, lately we’ve been seeing freight rates consistently fall.

To show what we mean, the Drewry World Container Index (WCI) fell to $1,669 per 40ft container here in early October 2025. That was its 16th consecutive weekly decline. It’s also the lowest freight rates, as measured by Drewry’s WCI, have been since January of 2024. This falling freight rate trend can be seen across major East-West routes like Shanghai to Los Angeles and New York:

• Shanghai to Los Angeles: Down 5% to $2,196 per 40ft container.
• Shanghai to New York: Down 2% to $3,200 per 40ft container.

Those were October 2nd’s weekly numbers.

Why Are Freight Rates Low?

These low freight rates are the result of typical supply-demand factors: overcapacity and soft demand.

In a Journal of Commerce (JOC) article published just today, Peter Tirschwell reported, in light of what he called “the recent rate plunge in the eastbound trans-Pacific,” trade from Asia to the US West Coast is down 28% since mid-September after falling 66% since June.

Tariffs and early shipping to avoid key tariff increases play a role in the demand decrease. There are also more traditional/seasonal factors like the lead-up to China’s Golden Week holiday that play a role.

On the supply side, there’s a large amount of capacity that has been and is entering shipping lanes in the form of new container ships. The growing capacity from new ships isn’t even expected to hit its peak until 2027, so carriers seem to have an ongoing challenge with capacity that threatens to keep downward pressure on freight rates.

However, carriers have become adept at lowering capacity while fighting reduced demand through blank (cancelled) sailings. Blank sailings tend to be hated by shippers, as they not only are used to put upward pressure on freight rates but delay shipments, adding more unreliability to an industry that has long been plagued by issues of original cargo delivery dates not being met.

Still, ocean freight carriers of late have been struggling to do enough to keep freight rates from falling. General Rate Increases (GRIs) and Peak Season Surcharges (PSS) are also things they’ve been struggling to maintain.

Freight rate wars between carriers are not what they were in the 90s, aughts, or even first half of the twenty-teens. But all it takes is one carrier undercutting a GRI to gain marketshare to make it difficult for other carriers to keep increases in freight rates in place.

Good Moment of Rates for Shippers

For shippers who’ve been waiting to import because of tariff uncertainty or those who imported early to avoid tariffs but are starting to need to replenish stock, recent trends in freight rates are excellent news. Lower freight rates help balance higher tariff costs.

Still, chasing trends in the international shipping industry is difficult. Freight rate volatility always seems ready to raise its head when rates are low, particularly if many importers and exporters look to take advantage of those rates.

Projections on how long or if this trend of falling freight rates will last are conflicting. There is some data showing flat rates moving into next week. Some believe that means freight rates have bottomed out and will start rising from here. Others think that indicates low freight rates will remain in place.

Nothing tends to last too long in the international shipping industry. Generally, it’s not a bad thing for shippers to jump on it when they see a good thing. What we know is freight rates are currently in a place where shippers rather than carriers would like to see them. We’ll see how and when that changes.