Why are carriers raising rates when demand appears to be declining?

Carriers are seeking rate increases despite cooling demand because trans-Pacific prices remain roughly $5,500 per FEU above pre-peak baseline levels established in May. Congestion at Asian ports and European hubs, plus lingering cargo backlogs, continue to support pricing pressure. Additionally, carriers are timing rate announcements to influence contract negotiations during the annual tendering season, when spot rates help guide multi-year agreement terms.

How likely are the $2,000 to $3,000 per FEU rate increases to stick?

Implementation success appears uncertain. Forwarders cite improving vessel schedule consistency and growing container availability as reasons to doubt these hikes will hold. Published reports from firms like Linerlytica describe November's announced increases on Asia-Northern Europe lanes as 'effectively doomed,' with carriers already discounting early-November bookings despite public rate announcements.

What operational impact could a port strike at Los Angeles and Long Beach create?

A strike by International Longshore and Warehouse Union Local 26 watchmen could disrupt terminal security and potentially trigger sympathy actions by other ILWU members affecting vessel, yard, and gate operations. While the 250 affected workers are small in number, the affected facilities handle 85 percent of Long Beach and 33 percent of Los Angeles volumes. The strike threat was extended from November 1 to November 4 under federal mediation, but negotiations remain active and uncertain.

Why are Asia-Europe rates rising when carriers expected post-peak weakness?

Mediterranean rates have climbed 23 percent and Northern Europe rates 10 percent over the past month despite expectations of softer demand. Congestion at Northern European hubs, backlogs in the Far East, and a coordinated October 30 labor action across 113 ports in 22 countries created upward pricing pressure. The return of vessels to shorter Suez Canal-Red Sea routes is gradually releasing capacity, but congestion continues on Asia-Northern Europe services.

How much longer will trans-Pacific rates stay elevated?

Recovery to pre-peak pricing before the next seasonal upswing remains uncertain according to Freightos analysis. A relatively short window exists between now and Lunar New Year demand strengthening. Currently, Asia-US East Coast rates are at approximately $9,900 per FEU (down 6 percent week-over-week) while West Coast rates hover near $8,300 per FEU, both substantially above mid-May 2024 baseline levels.

Shipping & Freight

High Impact

Container Rates Resist Decline as Carriers Demand $3K Hikes

Nov 4, 2026

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The signal

Container shipping rates on the trans-Pacific and Asia-Europe routes remain stubbornly elevated despite indicators that peak season demand is cooling. Carriers are aggressively pursuing $2,000 to $3,000 per FEU rate increases for November across major trade lanes, yet forwarders report improving space availability and more consistent schedules, suggesting these hikes face implementation challenges.

A complicating factor is the threat of a November 1 walkout by International Longshore and Warehouse Union watchmen at Los Angeles and Long Beach, which was postponed to November 4 during ongoing federal mediation. Approximately 250 workers would be affected, but these facilities handle roughly 85 percent of Long Beach cargo and 33 percent of Los Angeles cargo, making even a brief disruption significant.

Importers face a squeeze between high shipping costs and execution uncertainty, creating planning headwinds ahead of the critical holiday season and Lunar New Year demand cycles.

Companies affected by this story:

Union Pacific Railroad

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Frequently Asked Questions

What This Means for Your Supply Chain

Simulation Suggestion

immediate

What if the LA/Long Beach port strike occurs and lasts 5-7 days?

Simulate a week-long disruption at Los Angeles and Long Beach ports affecting inbound and outbound container operations during November. Model cascading delays on import cargo arriving during peak holiday season and export consolidation. Calculate dwell time increases, demurrage charges, and customer delivery commitments. Evaluate alternative routing through other West Coast ports (Oakland, Seattle, San Diego) and associated costs.

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Simulation Suggestion

this week

What if carriers successfully implement $3,000 per FEU rate increases?

Model the impact of full implementation of carrier general rate increases of $3,000 per FEU on Asia-US East Coast routes (baseline $9,900) and $2,000 per FEU on West Coast routes (baseline $8,300). Calculate total landed cost impacts for typical container shipments. Evaluate customer pricing pressure, margin compression, and potential demand shifting to less-congested routes or consolidation strategies.

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Simulation Suggestion

strategic

What if Red Sea route normalization accelerates and removes capacity constraints?

Model the impact of rapid acceleration in vessel repositioning to the Suez Canal-Red Sea route (Premier Alliance is adding two Asia-Mediterranean services in November). Simulate release of excess vessel capacity currently tied up in longer Africa circumnavigation routes. Calculate potential rate compression on trans-Pacific and Asia-Europe lanes if supply-demand rebalancing occurs faster than expected, and model timeline to reach pre-peak pricing.

Run this scenario

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Supply Chain Simulation: How It Works and How to Choose Software

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