Why does the cost of shipping by sea rise rapidly but fall slowly?

Structural Changes: High-Frequency Scheduling Redefines Industry Supply and Demand Dynamics

According to the latest report by the shipping analysis firm Sea-Intelligence, the capacity management model in the global container liner market is undergoing a profound structural transformation. In the first half of 2026, on the four major east-west routes from Asia to the East Coast of North America, the West Coast of North America, Northern Europe, and the Mediterranean, the cancelled capacity accounted for 10%-14% of the planned capacity. This figure is significantly higher than 6%-8% in the same period in 2019. This indicates that the previous market expectation of "a few, single-digit proportions of suspensions" has completely failed, and a higher level of capacity reduction is becoming the new normal in the industry. 

Unlike the passive and highly volatile suspension of shipping operations adopted during the pandemic to cope with the sudden drop in demand, current shipping companies have adopted proactive capacity reduction as a regular operational strategy to regulate market supply and demand. This strategy is more stable and regular, not only maintaining the market in a tight balance but also significantly improving the predictability of shipping companies in managing their capacity. The large number of new ships delivered has not directly translated into actual available shipping space in the market; instead, it has been absorbed by shipping companies through active and strategic suspension of operations, effectively controlling the scale of effective supply.

Capacity gap: Cancelled capacity growth rate far exceeds planned capacity growth rate

In recent years, a significant trend has emerged on the global main shipping routes: shipping companies have cancelled the growth rate of capacity far higher than the overall planned capacity growth rate. Taking the route from Asia to the East Coast of North America as an example, from 2019 to the first half of 2026, the planned capacity on this route increased by 46%, reaching over 6.09 million TEU; but during the same period, the cancelled capacity soared from 273,700 TEU to 863,400 TEU, an increase of more than three times. 

Other major routes also confirm this trend. The planned capacity on the route from Asia to the Mediterranean increased by 56%, but the cancelled capacity soared by 159%; the planned capacity on the route from Asia to Northern Europe increased by 20%, while the cancelled capacity rose by 83%; the planned capacity on the route from Asia to the West Coast of North America increased by 16%, and the cancelled capacity rose by 62%. This "capacity gap" indicates that the expansion of the global fleet's nominal size does not mean an equivalent increase in the actual available shipping space in the market. The newly added capacity is gradually evolving into a tool for shipping companies to regulate the market.

Short-term strategy adjustments: Increased overtime during peak seasons and slower cancellation pace

Although the high frequency of sailing has been a long-term strategy, under the drive of short-term peak season demand and high profits, the capacity regulation pace of shipping companies has also undergone minor adjustments. The shipping consulting agency Drewry predicts that from July 20 to August 23, 2026, the number of cancelled flights on the main east-west routes will gradually decrease from 54 in June to 36 in August, with the cancellation rate dropping to approximately 5%. Among them, the eastward trans-Pacific route will account for 51% of all cancelled flights. 

Meanwhile, the current container freight rates are still over 75% higher than those of the same period last year. Tan Hua Joo, the co-founder of the analysis agency Linerlytica, pointed out that in response to "significant profit opportunities", some shipping companies are increasing their overtime ships and even adjusting their route arrangements (such as restoring the Suez Canal route) to increase additional capacity input. This local release of capacity based on high operating rates reflects the flexible game between shipping companies in pursuing maximum profits and maintaining market balance.

Price resilience: Capacity management stabilizes the market

Thanks to the successive introduction and effective implementation of capacity management measures by major container shipping companies, the global spot container freight rates, after a consecutive 10-week increase, although have declined recently, the overall decline has slowed down and there are no signs of a sharp drop. This market performance further verifies the effectiveness of the strategy of shipping companies to control freight rates by controlling capacity. 

In the current complex environment where there is both a "new ship delivery boom" and "geopolitical disturbances (such as the Red Sea crisis)", shipping companies have become proficient in using measures like emptying ships and slow sailing to hedge against the pressure of new supply. As long as the freight rates remain high, shipping companies have sufficient motivation and confidence to continue maintaining a tight market balance through precise capacity deployment, thereby avoiding a significant drop in freight rates due to oversupply. This deep intervention ability in the market marks that the global container shipping industry has officially entered a new era of "active management" dominated by oligarchs.