Since early September, supported by rate hike expectations, container shipping on the Europe route has shown sustained strength, with the October contract rising 10% and the November contract rising 34%. It should be noted that this year's rate hike announcements differ from last year's in both background and absolute price levels. The market has already priced in a certain degree of sentiment around the realization of these rate hikes, and the subsequent driver will gradually shift from "expectation" to "realization." This report reviews the background, degree of realization, and conditions for realization of last year's rate hike announcements, and on that basis conducts scenario analysis for the spot price path in October-November of this year.

Review of Rate Hike Announcements in the Same Period of 2025

First Round: Late September to Late October — Stabilization but Limited Realization

The rate hike announcement for October 2025 also occurred in late September. Prior to that, there was typically no tradition of announcing rate hikes in late October. This round of rate hikes was mainly because quotations in early October had already fallen to the lowest level since the Cape of Good Hope diversion, approaching the full cost level of some carriers, and therefore did not follow the traditional rate hike rhythm of shipping companies. On September 25, Maersk opened its Week 42 booking at $1,800/FEU (up $400/FEU week-on-week). Since Maersk was the first to open bookings, its opening action effectively initiated this round of rate hikes. Other carriers subsequently followed with rate hike announcements, with targets basically referencing Maersk's $1,800/FEU, in the range of $1,800-2,100/FEU, representing an increase of more than $500/FEU over the average quotation in early October. Around the National Day holiday in early October, there were many blank sailings, and the scale of blank sailings during the 2025 Golden Week was higher than in 2024, so the blank sailing effect was relatively strong, allowing the initial rate hike to be partially realized. However, although capacity was low during the holiday, demand was also weak, and there was no large-scale cargo rollover; after the holiday, capacity increased, and loading rates could not support the continuation of firm pricing, so carriers cut prices to solicit cargo, with the actual cargo solicitation center rising by only $200-300/FEU. Meanwhile, after the holiday starting from October 9, carriers began announcing rate hikes for early November quotations, with targets in the range of $2,500-2,600/FEU.

Second Phase: Mid-October Loading Differentiation, Better Realization in Early November

In mid-October, carrier loading showed differentiation. Most shipping companies had already reached full load on voyages near the end of the month and shifted their focus to accumulating cargo to support firm pricing in early November. Among them, the GEMINI and OA alliances had already accumulated significant rolled cargo through long-term contracts and index-linked agreements, while the PA alliance, due to its larger spot exposure, further cut prices to solicit cargo. However, the overall recovery in loading rates slowed the downward pace of quotation centers. The accumulation of rolled cargo, combined with carriers' proactive blank sailings to tighten capacity, allowed the firm pricing in early November to be realized, with the average quotation reaching $2,250/FEU. However, due to differentiated loading conditions, the upper and lower limits of opening quotations varied widely ($1,900-2,600/FEU): the GEMINI and OA alliances experienced widespread full bookings at the end of October, supporting their high quotations, while the PA alliance faced weak customer booking willingness because vessel arrivals at the end of the month coincided with the Christmas holiday, putting pressure on cargo solicitation and leading to further aggressive price cuts starting in Week 46.

Third Phase: Late November Rate Hike Failure, Divergence in Pricing Consistency

In early November, carriers launched rate hike announcements for late November quotations, with a target of $3,000/FEU. However, as profit margins gradually opened up, the consistency of firm pricing in late November diverged, and late November was mostly characterized by rollover, with the rate increase ultimately falling through.

Attribution of Rate Hike Realization: Stockpiling, Blank Sailings, Loading Rates, and Market Sentiment

Starting in late September last year, carriers began efforts to firm up late October quotations. Although the initial degree of realization was limited, it did indeed mark the point at which the market stabilized. Significant rate hike realization occurred in early November, while late November was relatively limited. For carriers, rate hike announcements are repeated attempts during the off-season, but the degree of realization varies. The better realization of rate hikes in early November last year was supported by two main factors: First, after the Cape of Good Hope diversion, Europe's stocking season was slightly advanced, providing stocking support, and combined with long-term contract cargo and index-linked agreements, some carriers had better loading rates in late October, accumulating some stockpiled cargo for early November; Second, against the backdrop of numerous blank sailings in Week 46 of early November, supply tightened rapidly, significantly easing cargo solicitation pressure. It can be seen that the key to rate hike realization lies in the level of loading rates, and the prerequisite indicator for off-season loading rates is whether there is stockpiled cargo or blank sailings. On the other hand, market sentiment also had an impact. Last September, freight rates basically showed an alternating downward trend, in which Maersk and PA alliance quotations were more likely to drive spot prices lower: Maersk opened bookings earlier, and after its price cuts, other carriers needed to move closer to its level; PA alliance members had larger spot exposure, especially under greater cargo solicitation pressure during the off-season, and could not rely on long-term contract cargo to stabilize loading rates. However, this year Maersk's online quotation system has changed, adopting a new discount model, which instead gives the market a psychological expectation of relatively stable freight rate trends, and market sentiment is therefore relatively better.

Scenario Analysis for October-November This Year

Currently, carriers' opening quotations for early October have been published, basically flat compared with late September. On the supply side, capacity in Week 41 dropped to 160,000 TEU, a significant contraction that may support early October quotations. The key to realizing the late October rate hike lies in stockpiling. Carriers are still lowering quotations during the Golden Week, indicating poor cargo receipt performance and the need to cut prices to solicit cargo. It is expected that effective stockpiling will be difficult to form after Golden Week, making realization more difficult. In November, there are also concentrated blank sailings. Although the current scale of blank sailings is smaller than last year, there are still drivers for realization this year: First, demand growth year-on-year is considerable, with Asia-Europe container trade volume growing 12% year-on-year from January to July; Second, since freight rates peaked and declined this year, the spot side has not yet experienced a sharp collapse, and market sentiment is relatively good. Therefore, it is expected that the November rate hike can still be partially realized. If last year's weekly price changes are fully replicated, the average quotation for the delivery week corresponding to the EC2610 contract would be about $3,200/FEU, and the quotation center corresponding to the EC2611 contract would be about $3,770/FEU. However, as mentioned above, realization in late October is relatively difficult and may open flat or even continue to decline. The November rate hike is expected to be partially realized, but under overall pessimistic expectations, the overall level of rate hike realization in October-November may fall short of the same period last year.

Outlook

Although November quotations have not yet been announced with rate hikes, the November contract has performed relatively strongly, supported by position rolling and post-holiday rate hike expectation pricing; both the current October and November contracts have relatively high expectations for rate hike realization. The spot price corresponding to the November contract has already approached $4,000/FEU. As the positive factors driven by rate hike expectations are gradually released, the market's focus will shift to actual realization. Follow-up indicators include: actual execution of blank sailings, the scale of cargo solicitation and stockpiling in late October, and changes in loading rates. These factors will affect the market's expectations for the degree of realization of the November rate hike.