Container Shipping Rates are Rising – Why this is happening

• Minor update: As of January 2026, rates have largely stablized

In the bustling world of global shipping, recent developments have caused a bit of a stir, especially in key maritime routes like the Panama and Suez Canals.

Let’s unpack what’s happening and how it’s impacting container rates, particularly on the East Asia to West Coast USA route.

A Dry Spell at the Panama Canal

Over at the Panama Canal, there’s a bit of a water crisis. The canal, usually a beehive of shipping activity, is facing lower water levels. Lake Gatun, the lifeline of the canal, is about 6 feet below its desired level.

This drop in water levels has led to a decrease in the number of ships that can pass through daily, down from the usual 38 to just 24. In February 2024, this will reduce further to 18 ships per day, more than a 50% decrease. For those of us not navigating these waters, it means a slowdown in the movement of goods, with ripple effects felt across the globe, including the Asia-Pacific trade routes.

Tensions Around the Suez Canal

Shifting our gaze to the Suez Canal, there’s more than just natural factors at play. The region has been a hotspot due to ongoing and rising conflicts around the Red Sea, prompting major carriers like Maersk to pause their operations.

This decision is akin to choosing the lesser of two evils: wait it out or take a longer detour around Africa. Either way, it spells delays and extra costs, further complicating the global shipping scene.

he full story on these disruptions can be found on Translogistics.

      

Pacific Container Rates: Feeling the Impact

So, what does all this mean for the Pacific container rates? In simple terms, it’s all about the domino effect. With key routes facing delays and longer transit times, the cost of shipping goods across the Pacific is on the rise, as businesses look for alternate routes. This not only impacts businesses but eventually trickles down to consumers as well.

We’re talking about everything from electronics to daily essentials that cross the ocean to reach us. To get the latest on these rate changes, check out FreightWaves.

The Bigger Picture

These recent challenges in the world of shipping underscore the delicate balance of our global trade systems. The interconnectedness of our world means that a drought in one region and geopolitical tensions in another can have far-reaching effects, including on the prices we see on store shelves.

Will our rates change?

There are currently no plans to change our rates in January, despite an increase in 50% of the container costs. However, there is a strong likelihood that we’ll have no choice but to increase rates in February to offset the rise in container shipping costs.

Please take this opportunity to ship whatever you can in January, as the global situation may affect rates for months to come.