What’s Happening with Freight Rates as We Head for 2026?

You can put a fork in it; international shipping’s peak season is done. And despite a little freight rate increase last week, it’s been done. At least on the ocean freight side. Air freight is getting a December surge, which is a normal thing with last-minute e-commerce shipping for Christmas. However, ocean freight’s peak season was far from typical.

2025’s Atypical International Shipping Peak Season

With all the tariff uncertainty, importers stocked up inventories early this year. While there was a good shipping surge in August, September through November did not have the type of peak season demand the international shipping market is used to seeing. That’s even only thinking of November as part of the peak season in years that it’s strong.

In a “State of the Industry Report” from FreightWaves and Ryder, importing volumes were nicely summarized from August through projections into next year:

Those seeking further confirmation that maritime’s peak season is well and truly spent need look no further than at U.S. container import volumes. After peaking to a new all-time high in late August, volumes naturally fell in September. October’s volumes were essentially flat on a monthly basis — only the second time in a decade that October failed to show a seasonal increase — and finished well below the range seen in a typical peak season.

Container volumes deteriorated further in early November, though a dead-cat bounce around the middle of the month did occur. Forecasts now call for accelerating [year over year] declines through December, followed by a sharper drop in Q1 2026 as the early-2025 front-loading wave fully unwinds.

Basically, August was it for the peak season this year. We’ll come back to 2026 projection as we talk about freight rates.

Low demand compared to capacity (supply) made freight rates low this year. In fact, freight rates have done a great deal of falling in 2025, including in October when freight rates often are climbing with the peak season.

Ocean Freight Carriers’ Attempt to Fight Falling Freight Rates

Ocean freight carriers tried to combat falling freight rates with General Rate Increases (GRIs) and blank (cancelled) sailings. They even had some success in November, but it was short lived because of the natural laws of supply and demand. FreightWaves and Ryder gave some details on that too:

[Carriers’ GRI] gambit, which not only sought to combat weak demand but also rising overcapacity via blanked sailings, went into effect on Nov. 1. Initially, the GRIs did manage to double container rates from their October lows. Yet these gains were held for only two short weeks before rates fell below even their pre-GRI levels, if not quite as low as October’s nadir.

As volatile as ocean freight rates traditionally are, importers shouldn’t be worried about freight rates surging despite the fact that previously falling freight rates did rise last week, as recorded by the maritime research company Drewry:

The Drewry World Container Index (WCI) rose 7% to $1,927 per 40ft container after three weeks of decline, mainly due to rate hikes on Transpacific and Asia–Europe trade routes.

I wouldn’t call a 7% increase insignificant; however, that increase is coming off of very low freight rates. According to Drewry, before that rise, ocean freight rates had been at their lowest point since January.

Looking specifically at Drewry’s ocean freight spot rates from Shanghai to Los Angeles and New York, last week’s climbs were 8% to $2,256 per 40ft container and 6% to $2,895, respectively.

With projections calling for shipping volume declines to finish out 2025 and during the first quarter of 2026, carriers face a potentially difficult overcapacity problem. Projections can always be wrong, but as things stand, there looks to be significant downward pressure on freight rates going into next year. Plus, there’s a wildcard that could make that downward pressure even greater.

We Could See Low Freight Rates in 2026

The halted Houthi attacks in the Gulf of Aden and Red Sea could open up container shipping through the Suez Canal again. It’s widely reported that would also open up around 10% of the global shipping capacity to the international shipping market with ships no longer needing to sail the long way, down and around Africa. Carriers are slow to return shipping to the Suez Canal probably as much for financial reasons as the security ones.

However, some ships are returning to the waters that connect the Indian and Atlantic Oceans. Carriers may not be able to keep avoiding those waters as 2026 progresses.

Freight rate behavior will be interesting to watch. Eventually, inventories will need to be restocked. There’s a great deal of investment going into domestic production, but that won’t instantly replace foreign sourcing of goods. It would never fully replace foreign sourcing. How much marketshare American-produced goods will gain is yet to be seen.

Meanwhile, carriers have shown ability to manipulate capacity with massive blank sailings orchestrated through carrier alliances. Even so, it’s hard to imagine carriers getting ahead of their overcapacity issues in the first quarter of next year.

But if there’s an earlier-than-expected surge in shipping to restock inventories that retailers imported early to fill, there could always be a freight rate increase surprise. You also never know what unexpected and uncontrollable events may happen to impact the international shipping industry. After all, overcapacity looked like it was looming to create incredibly low freight rates before the Houthi attacks began in the Red Sea and skyrocketed freight rates in late 2023. At first, that was compounded by reduced passages through the Panama Canal because of drought.

Surprises aside, it looks like we’re heading into 2026 with significant downward pressure on freight rates.