Commentary Trading Places

By Peter Tirschwell

The atmosphere among carriers has changed in part due to recent experience, which is more shared than divergent.

Does the recent rate plunge in the eastbound trans-Pacific— with trade from Asia to the US West Coast down 28 % since mid-September after having fallen 66 % since June amid a deepening sense of gloom among carriers— qualify as a“ rate war?”

Before answering, it might help to define“ rate war” in a container shipping context. Although the term has resurfaced in recent months to describe rates in the vicinity of loss-making for carriers, it was more common in the 1990s.

Back then, it described not just downward rate adjustments by carriers to reflect realities of supply and demand, but predatory moves by one carrier on another’ s book of business, a result of animosity and carriers’ single-minded focus on market share.

Many believe that the market has moved on from those days. While it’ s as price competitive as ever despite significant consolidation, animosity among carriers has subsided over the years despite well-known rivalries, particularly among family-owned European carriers. For example, it would be unusual for a carrier CEO to make remarks today similar to this one from Nils Smedegaard Anderson of Maersk during the Great Recession in 2009, as reported by American Shipper,“ We will not allow anyone to take market share from us by systematically undercutting our prices. If it comes down to that we’ re ready to fight it out on prices.”

Writing about this topic in his newsletter, Nils Roche, former deputy general manager for operations at PIL, said,“ If a rate war is to be defined as 1) lowering the rate to below breakeven level and 2) that is with the intent to harm another player with the potential goal of forcing consolidation, then I agree that today’ s situation is not a rate war.”

Jon Monroe, a veteran carrier, technology executive and non-vessel-operating common carrier, said container lines“ no longer follow the traditional path of predatory pricing. I believe the carriers have too much at stake to play the oldest games of predatory pricing. That does not mean they won’ t drop their rates for more business.”

For some, that is the point: it doesn’ t matter what you call it when rates are headed south amid overcapacity and evaporating volumes, and the mantra from on high is“ My ship must be full, do as you must,” as Roche put it.

But if current rate competition lacks the edge it had in prior years, the question is why and whether it matters if the overall effect is to substantially lower rates for shippers in a down market.

The atmosphere among carriers has changed in part due to recent experience, which is more shared than divergent. On one hand, carriers are going their separate ways in acquisitions and business models, pursuing more holistic relationships with shippers covering a range of logistics services.

But having said that, the accumulation of record profits during the COVID-19 pandemic, and the subsequent discovery after years of self-doubt that making money is within their reach, solidified a shared view among carriers that actions contrary to the interests of their customers— such as blank sailings, slow steaming at scale or imposing multi-thousand-dollar rate increases at the first sign of market tightness— are no longer regrettable, but desirable in pursuit of profits that for decades had been elusive.

One factor that could accrue to shippers’ benefit is in some ways the best of both worlds: a free and transparent market in freight rates occurring in parallel with efforts by several carriers to build deeper partnerships with shippers that in a down market they will struggle to be fully compensated for.

The first half-year of the Gemini alliance of Maersk and Hapag-Lloyd largely delivered the very high on-time reliability initially promised, but they are struggling so far to translate that into premium pricing.

“ I don’ t think customers have experienced this long enough that they’ re ready to entertain such a discussion, but it is something that is going to come,” Maersk CEO Vincent Clerc told investors on Aug. 7.

In other words, as the market deteriorates in the fall of 2025, Gemini is mirroring earlier carrier struggles to translate reliability into profitability, similar to Daily Maersk launched in 2011 or APL maintaining high schedule reliability in the trans-Pacific.

Until the market rebounds, they may have to settle for stickiness in regard to customer relationships and cargo on their ships, but not pricing.

email: peter. tirschwell @ spglobal. com

54 Journal of Commerce | November 3, 2025 www. joc. com