Ocean Freight Rates Soften Ahead of March Hikes
Global ocean freight rates on major export routes are currently subdued following a period of softening spot prices. However, volatility is expected to continue, as carriers have announced rate increases for March 2026. The market dynamics suggest a window of opportunity for exporters before potential cost increases and capacity adjustments take effect.
- Drewry's World Container Index continued its decline for a sixth consecutive week, falling 1% to $1,919 per 40ft container as of February 19, 2026. Spot rates on the Shanghai to Rotterdam route also dropped by 1% to $2,109. This downward trend is attributed to weak demand following the Lunar New Year, prompting carriers to announce blank sailings to manage capacity. - The potential reopening of the Red Sea to shipping traffic is expected to exert further downward pressure on freight rates in 2026. A full resumption of transit through this key route would release a significant amount of vessel capacity currently absorbed by the longer voyages around the Cape of Good Hope, likely intensifying an existing oversupply issue. - India, the world's largest rice supplier, has lifted its export ban on 100% broken rice as of early March 2025, after having already eased restrictions on other rice varieties in late 2024. This full return to the market has contributed to a sharp decline in global rice prices, with the price of 5% broken rice from Vietnam and Thailand dropping by 38-45% between late 2024 and early 2025. - The Thai Baht is forecast to soften against the Euro through 2026, with projections suggesting a rate of around €0.0255 by the end of the year. Some month-by-month forecasts indicate fluctuations, but the general trend points towards a weaker Baht, which could impact export margins. - The European Union is set to implement a new safeguard mechanism on rice imports starting January 1, 2027, which will impose higher tariffs if import volumes from countries like India and Pakistan exceed historical averages. However, Thailand and Vietnam are expected to see limited impact from this particular measure. - Demand for organic and sustainably sourced rice is growing in Europe, driven by consumer awareness of health and environmental issues. Germany stands out as the continent's largest organic food market, and while specialty rice is becoming more available in mainstream supermarkets, the majority of sales are still within specialized organic retail outlets. - In 2026, shippers will face higher costs in Europe due to the EU's Emissions Trading System (ETS), which will require shipping lines to cover 100% of their emissions, an increase from 70% in 2025. This is expected to lead to higher emissions surcharges from carriers in the first quarter of 2026. - While ocean freight spot rates are softening, shippers should anticipate annual price hikes through General Rate Increases (GRIs). For 2026, most major carriers have announced GRIs of approximately 5.9% for both standard and express services.
