Key insights:

1. The transpacific container market has moved firmly past the pre-Lunar New Year rush, with reports of muted demand; Asia-US West Coast rates slipped to about $1,900/FEU, returning to early December levels and suggesting we’ve already entered the post-LNY/pre-peak season lull.

2. The NRF projects Q1 US ocean imports will be down 7% year-on-year as retailers exercise caution and comparisons reflect last year's frontloading.

3. US ports have mostly recovered from recent storms, though inland backlogs are causing delays; European ports faced a second round of weather disruptions last week but operations have now resumed. Carriers warn of congestion from disrupted schedules.

4.Asia-Europe ocean rates are also cooling with prices to both N. Europe and Mediterranean down more than 8% last week. But carriers are planning March GRIs, suggesting anticipation of a typical post-LNY bump.

5. Record global container volumes last year weren't enough to maintain carrier revenue as fleet expansion continues; Hapag-Lloyd and Maersk reported earnings drops with Maersk posting Q4 losses despite volume growth, and forecasting either a 2026 $1B profit or loss depending largely on Red Sea transit resumption and reflecting the uncertainty in the market.

6. President Trump signed executive orders reducing India tariffs and empowering departments to impose tariffs on countries trading with Iran or selling oil to Cuba if they choose — representing a shift to authority-backed tariff threats; meanwhile, Hutchinson Ports is seeking arbitration over invalidated Panama port concessions, with China reportedly asking state companies to pause Panamanian development plans.

7. Global air cargo volume growth is projected to slow this year, with indications of contracted China-US e-commerce volumes since de minimis closure and slowing e-commerce growth to Europe; the EU will implement handling fees for low-value imports starting July ahead of 2028 de minimis rule changes, while some EU countries are already charging for parcels with volumes falling as a result.

8. China-N. America air cargo rates climbed 9% to over $7.30/kg, possibly reflecting pre-LNY demand; pre-Valentine's Day South American flower exports have pushed rates to N. America to $2.10/kg and Europe to $1.95/kg, up 8% and 17% respectively since late January.

Ocean rates - Freightos Baltic Index:

• Asia-US West Coast prices (FBX01 Weekly) decreased 21% to $1,916/FEU.

• Asia-US East Coast prices (FBX03 Weekly) decreased 10% to $3,457/FEU.

• Asia-N. Europe prices (FBX11 Weekly) decreased 8% to $2,548/FEU.

• Asia-Mediterranean prices (FBX13 Weekly) decreased 9% to $3,784/FEU.

Air rates - Freightos Air index:

• China - N. America weekly prices increased 9% to $7.32/kg.

• China - N. Europe weekly prices decreased 3% to $3.33/kg.

• N. Europe - N. America weekly prices increased 1% to $2.56/kg.

"The transpacific container market is firmly post the pre-Lunar New Year rush this year, with reports that demand increase that did materialize was muted. And while ocean rates typically ease as the holiday approaches, they normally remain elevated relative to levels before the rush until after the post-holiday backlog is cleared.

This year, however, Asia - US West Coast rates that slipped more than 20% last week to about $1,900/FEU are all the way back to early December levels, suggesting that prices are already entering the post-LNY, pre-peak season lull. The latest National Retail Federation US ocean import report projects March volumes will dip 5% month-on-month, with Q1 demand expected to be down 7% year on year as retailers exercise caution and as totals are compared to volumes frontloaded in Q1 last year.

US container ports and air hubs have mostly recovered from the recent winter storm, though backlogs at inland rail terminals continue to cause delays for shippers. Bad weather in Europe closed ports in the Western Mediterranean and disrupted transits in the Bay of Biscay for a second time towards the end of last week. As conditions have improved this week operations and transits have resumed, though carriers warn of congestion and delays due to disrupted schedules.

Despite the congestion, easing pre-LNY demand means cooling rates on these lanes as well, with Asia - N. Europe and Mediterranean prices both down more than 8% last week, and daily rates so far this week slipping further to $2,700/FEU to Europe and $3,700/FEU to the Med. Though prices to Europe are about down to pre-LNY rush levels, those December rates were supported by strict capacity reduction, and expectations for a post-LNY bump on these lanes are reflected in GRIs of several hundred dollars per FEU planned for March.

Record global container volumes last year weren’t enough to keep carrier revenue growing as the global fleet continues to expand – likely a sign of things to come. Hapag-Lloyd and Maersk both reported drops in earnings last year, with Maersk among carriers reporting losses for the first time in a long time in Q4 despite volume growth. And as a clear indication of the current uncertainty in the market, even with projections for demand growth again this year, Maersk forecasts either a profit or loss of around $1B for 2026, mostly hinging on whether or not container traffic returns to the Red Sea.

In trade war developments, President Trump signed executive orders codifying tariff reductions for India, and empowering the departments of commerce and state with the discretion to impose tariffs on countries trading with Iran or selling oil to Cuba – examples of a new kind of authority-backed tariff threat as compared to declarations on social media. Hutchinson Ports is seeking arbitration with Panama over the recent invalidation of their port operation concessions there, with China reportedly asking state companies to pause any development plans in Panama in retaliation.

Global air cargo volumes are projected to increase this year, though not as quickly as last year and at a big step down from the rapid e-comm driven rise in 2024. There are indications that China-US e-commerce volumes have contracted since the de minimis closure last year, and signs that e-comm growth to Europe is slowing. The EU is set to change their de minimis rules by 2028, and will assign a handling fee to low-value imports starting in July. But some EU countries are already charging for parcel imports – with reports of falling e-comm air volumes as a result – and opposition to de minimis from domestic retailers continues to grow, with objections by businesses in Poland the latest example.

Freightos Air Index data show China - N. America rates continued to climb last week, up 9% to more than $7.30/kg possibly reflecting some pre-LNY bump. And the pre-Valentine’s Day surge of S. American flower exports has prices to N. America at $2.10/kg and to Europe at $1.95/kg up 8% and 17% respectively compared to the end of January."