Global shipping diverges: container rates face downward pressure as tanker rates remain high and car transport demand grows
Red Sea container ship traffic has recovered to 65% of normal levels. Bank of America expects container shipping prices to ease modestly over the coming months; tanker and dry bulk rates remain high, and demand for car transport is growing, though supply and demand constraints differ across markets.
Original source：BofA Global ResearchFirst published on Unhidea：Original source date：
Key takeaway
Bank of America sees container freight rates under pressure from the resumption of Red Sea transits and new vessel deliveries, while recent prices and demand in tanker, dry bulk and car transport markets each have their own support.
How will the resumption of Red Sea transits affect container shipping prices?
Over the past two weeks, Red Sea container ship traffic has recovered to 65% of normal levels, up from 50% in September, with more routes planning to return. Bank of America expects container shipping prices to ease modestly from their peak over the coming months.
The pace of decline varies: through the report date in the fourth quarter of 2026, the average Shanghai Containerized Freight Index (SCFI) was up 8% from the third quarter. European routes fell 21%, while rates on routes to the US West Coast and East Coast rose 13% and 11%, respectively. Bank of America says resilient off-season demand and persistent congestion have kept quotes on European and trans-Pacific routes broadly near SCFI levels for now.
Capacity affected by global port congestion accounts for about 10% of the fleet, below the peak of 11%–12%; but Bank of America believes typhoon Kalmaegi and a concentration of vessel arrivals associated with the resumption of Red Sea transits could cause congestion to rebound in the coming weeks.
How great is the medium-term supply-demand pressure in container shipping?
Demand is still growing: global container trade volumes rose 3.8% year over year in August and 5.1% in the first 8 months of 2026. However, US container imports rose 17% year over year over the past four weeks, while cumulative imports year to date were flat against the same period last year.
The container ship orderbook is equivalent to about 44% of existing fleet capacity. Bank of America forecasts demand growth of 5.3% and growth in capacity actually entering service of 13.0% in 2027; the supply-demand gap in its model is negative 7.7 percentage points. A large volume of new vessel deliveries and the resumption of Red Sea transits are central to the bank's expectation of excess capacity over the coming years.
Why are tanker rates so high, and what is the forward outlook?
Crude tanker spot rates have fallen from extreme peaks but remain high: rates for very large crude carriers (VLCCs) from Oman to China are around 650 thousand US dollars per day, and those from the US to China are around 450 thousand US dollars per day. The forward curve indicates that average VLCC rates in 2027 may remain around 200 thousand US dollars per day, below those spot levels.
Disrupted waterways and weaker cargo volumes coexist: over the past week, crude tanker traffic through the Strait of Hormuz was about 2% of normal levels; the three-month moving average of seaborne crude volumes in September fell 6.4% year over year, and Middle Eastern crude exports fell 19% year over year in October.
Bank of America's crude tanker supply-demand model forecasts demand growth of 4.3% and effective fleet growth of 5.6% in 2027, with a supply-demand gap of negative 1.3 percentage points. Strong forward rates and full-year capacity growth outpacing demand are two sets of indicators that need to be considered together.
How long can high dry bulk rates last?
Through the report date in the fourth quarter of 2026, dry bulk rates were 31% higher year over year; the forward curve indicates that average rates from the fourth quarter through the first quarter of 2027 may be 25% higher year over year. However, the average Capesize rate in the fourth quarter to date has fallen 18% from the third quarter, showing that rates for large vessels have retreated from their highs.
Water levels in the Panama Canal have improved recently, while bulk carrier traffic remains down about 30% year over year; Bank of America believes El Niño's effects could intensify disruptions. Demand is not strengthening across the board either: Clarksons data show dry bulk demand fell 1.4% year over year in September, with iron ore and coal demand rising 1.1% and 6.2%, respectively, and grain demand falling 2.9%.
Why is the car transport market tightening again?
Bank of America says car transport demand grew 9.4% year over year in September 2026 and 10.4% in the first nine months; China's car exports rose 61% year over year in September, supporting transport demand.
Car carrier Höegh's net freight rate per cubic metre recovered to 82 US dollars, up 4% year over year. Bank of America attributes the change to a tightening market and greater customer acceptance of fuel surcharges.
Additional capacity remains an important constraint: the car carrier orderbook exceeds 26% of the existing fleet. Bank of America's model forecasts demand growth of 9.4% and net supply growth of 9.1% in 2027, a difference of only 0.3 percentage points.
