Ocean freight rates seen falling 30% as Red Sea services return

Carriers committed 467,297 TEU of weekly Red Sea capacity in October.

Global ocean container shipping spot rates are forecast to fall 30% in 2027 as the return of services through the Red Sea and Suez Canal releases capacity back into the market, according to Xeneta.

The global average long-term rate is also expected to fall 5% in 2027, with both forecasts based on third-quarter (Q3) 2026 averages.

Carriers committed 467,297 twenty-foot equivalent units (TEU) of weekly capacity to the Red Sea in October 2026.

“Whilst this is 50% of the pre-crisis level in August 2023, it is roughly double the offered capacity compared to the end of August 2026,” Xeneta said.

The return of networks to the Suez Canal releases capacity absorbed by longer diversions around the Cape of Good Hope, with about 599,000 TEU already released.

This capacity will add to a global fleet expected to grow 6.8% in 2027, as carriers are due to take delivery of 2.9 million TEU of new capacity and demolish 0.5 million TEU. This follows 4.9% fleet growth in 2026.

Meanwhile, global container shipping demand will grow between 2.5% and 4% in 2027, down from 4.7% in the first eight months of 2026.

“The demand growth in 2026 was built on frontloading as shippers looked to protect supply chains from the ripple effects of disruption in the Strait of Hormuz and rising fuel costs,” Xeneta said. 

It expects a slower start to 2027 followed by a weaker peak season.

Supply growth is therefore expected to outpace demand in 2027, although market fundamentals could be overpowered by major supply chain shocks.

Peter Sand, Chief Analyst at Xeneta, said the 30% decline is not guaranteed.

Sand added that the opposite extreme is also possible if a deterioration in the security situation in the Red Sea forces carriers to revert to Cape of Good Hope diversions, which would disrupt ocean networks and put upward pressure on rates.

Global on-time arrivals were 27% in Q3, with Far East-Europe collapsing to just 4% in September.

Low water levels in the Panama Canal could also see restrictions enforced and shippers forced to pay a premium to secure timely transits.