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Uncertainty shrouds Asia – Europe ocean contract negotiations

By Greg Knowler

Ocean shippers on the Asia – Europe trade are facing widespread market uncertainty as they prepare for 2027 contract talks with carriers, with some cargo owners opting to delay negotiations in the hope that supply-demand metrics stabilize through the fourth quarter.

When the tender rounds get underway, flexibility in pricing and loading guarantees are likely to be a key focus in the long-term rate discussions, panelists told the Journal of Commerce Asia – Europe Container Shipping Outlook webcast on Oct. 8.

“ Shippers who would have traditionally gone to bid have actually gone for extensions because of the amount of volatility still in the market and the unknowns,” said Chantal McRoberts, director and head of DSCA advisory at Drewry Shipping Consultants.“ That is making shippers nervous about going to bid now because they don’ t want to lock in an inflated rate when all the market commentators are talking about excess capacity and softening demand.”

“ Shippers who would have traditionally gone to bid have actually gone for extensions.”

Data from Drewry shows that Asia – Europe experienced 13 straight quarters of growth through the second quarter of this year, with second-quarter volumes up 9.2 % year over year following a 15 % rise in the first quarter. First-half volume grew 12 % year over year, and the shipping consultancy has forecast 8.4 % growth this year before growth falls sharply to 0.2 % in 2027 and increases 1.5 % a year until 2030.

Capacity is outpacing demand, McRoberts noted, with utilization forecast to fall from 87 % to 79 % in the fourth quarter, which will weigh on rates.

It is a similar forecast for the Asia – Mediterranean trade that has had 14 straight quarters of growth. In the second quarter, volumes rose 12.9 % year over year, with 8 % growth expected for full-year 2026 before slowing to 1.7 % to 2.6 % a year through 2030.

There is also excess capacity on the trade lane. Capacity rose 17 % year over year in the second quarter and utilization is forecast to fall to 70 % in the fourth quarter, again putting pressure on rates, according to McRoberts.

Average spot rates from North Asia to North Europe and the Mediterranean, which had been in steady decline since hitting a nearly two-year high in July, began to firm in October, rising to $ 3,800 per FEU and $ 4,200 per FEU, respectively, in the week of Oct. 15, according to Platts, a sister product of Journal of Commerce. But even as they fell, both rates remained well above prior-year levels, with their mid-October readings more than double those recorded in the same week of 2025.

If that wasn’ t enough, carriers are piling on surcharges on top of the base rates, port congestion is adding transit delays at both ends of the Asia – Europe trade and schedule reliability is at dismal levels. The latest schedule reliability data from Xeneta subsidiary eeSea shows on-time vessel performance fell to 4 % on Asia – North Europe services and 3 % on Asia – Mediterranean routes in September.

“ But it’ s the surcharges that are causing the biggest consternation,” McRoberts said.“ We’ re seeing some inflated fuel prices appear, and we’ re seeing some inflated pre-peak season surcharges coming in, so it’ s really important that shippers put up guardrails around the contract rates and make sure they are derisking around these surcharges.”

Tough to forecast

McRoberts advises shippers to control fuel and bunker adjustment factor( BAF) exposure by separating it from the base ocean freight rate, and to push back against additional surcharges.

“ Rates are expected to soften in 2027, so use benchmarking to track the market and build your timeline to optimize market conditions for tenders,” she said.

Antonios Rigalos, managing partner of ShiftX, a network of European shippers that negotiates contracts directly with carriers, said 2026 was a satisfactory year for his members, despite higher-than-anticipated emergency bunker surcharges.

“ What is always important is to agree upfront on mechanisms that manage how rates go up and down, and if there are any surcharges, shippers need to put in a sunset clause with a clear time frame and gate dates attached to it,” Rigalos told the webcast.

Asia – Europe rates tick higher after six-month skid

Container spot rates from Asia to N. Europe and Mediterranean, in USD per FEU

USD per FEU

$ 8,000

$ 6,000 $ 10,000 $ 4,000

$ 2,000

$ 22 $ 0

L Jan 2025 Jul, 2024 Jan 2026

Source: Platts, S & P Global

North Asia – UK Continent North Asia – Mediterranean

Jul

14 Journal of Commerce | November 2, 2026 www. joc. com

November 2. 2026 | Page 14

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