As freight rates continue to plunge to “unbelievably low” levels, major shipping giants are taking drastic measures to stabilize the market. These strategies include voyage cancellations, capacity reallocation, delays in new route launches, and overall capacity reductions.
47 Voyages Canceled in the Coming Weeks
According to Drewry’s predictions, 47 out of the 715 scheduled voyages on key transatlantic routes will be canceled over the next five weeks, representing a 6.57% reduction in scheduled services. This is a clear indication that shipping companies are taking steps to mitigate the impact of falling rates.
Capacity Shifts and Delayed Launches
Mediterranean Shipping Company (MSC) has confirmed the withdrawal of its Wild Horse route across the Pacific, shifting its largest 24,000-TEU container ship from the Asia-North Europe route to Mediterranean and West African routes. Similarly, the Ocean Alliance has delayed the launch of its new Asia-North Europe route that was originally scheduled for March. Premier Alliance also anticipates postponing two new Pacific routes planned for May.
Cutting Back on Capacity Amid Overcapacity Concerns
Data reveals that from the end of 2020 to the end of 2024, global container capacity has increased by over 33%, while global cargo volumes have grown by less than 10%. Industry leaders have raised concerns that the issue of overcapacity is growing, as new ships are delivered, and only a portion of the excess capacity can be absorbed due to port congestion and ongoing issues like the Red Sea crisis.
The total global capacity in March 2025 stood at 1.686 million TEUs, a decrease of 81,000 TEUs compared to the previous month. Despite this, capacity remains 16% higher than the same time last year, signaling the potential for further, more significant capacity cuts in the near future.
Data from MDS Transmodal indicates a notable reduction in capacity on Pacific routes in March, with a 5% decrease compared to February. Whether shipping companies will continue to trim capacity remains uncertain, and the next few months will be critical in determining the direction of the market.
As the shipping industry navigates these turbulent waters, all eyes are on whether these drastic steps will help balance supply and demand, and ultimately stabilize the freight market.
