From Peak to Pivot: Asia–Europe Market Update Ahead of CNY

The Asia–Europe market is moving into the final phase of January with clearer confirmation that recent rate peaks have passed and carriers are shifting focus toward securing pre-holiday volumes. Pricing behavior, capacity deployment, and geopolitical developments are all converging into a more transitional market environment as we approach the Chinese New Year period. This update is intended to enhance origin-side visibility and support expectation management for shipments moving from Asia into Europe over the coming weeks.

Below is our consolidated assessment based on trade team observations and current market developments.

Rate Trend Outlook

• Spot market performance indicates that short-term rate ceilings have been confirmed, with pricing gradually softening as carriers approach the end-of-month window for building pre-holiday rolling cargo.

• PA alliance carriers have adopted more aggressive pricing tactics to capture volume, particularly on sailings where utilization pressure is higher. OA alliance members have followed the prevailing market center more rapidly to defend load factors.
• Competitive pricing behavior has intensified across alliances, with selective reductions used as a primary tool to stimulate bookings rather than through formal GRI or PSS announcements.
• Month-end pricing sentiment remains defensive. Carriers are showing a strong willingness to trade price for volume in order to secure sufficient liftings before the Chinese New Year slowdown.
• Near-term attention is focused on late-January and early-February booking windows, where additional downward adjustments remain possible if demand does not materially improve.

Capacity & Space Forecast

• Effective capacity on the Asia–Europe trade continues to be actively managed through blank sailings and service adjustments, particularly around the Chinese New Year period.
• Latest schedule data shows January capacity from East China to Europe has been revised slightly downward on a sequential basis, with no pending or undecided sailings remaining. This provides clearer visibility for near-term planning.
• February weekly capacity is projected to decline further compared with January, reflecting holiday-related adjustments. Despite this, year-on-year supply remains structurally higher due to increased fleet deployment and alliance transitions.
• During the three-week Chinese New Year window, average weekly capacity is still expected to exceed last year’s levels, indicating that supply-side discipline alone may not be sufficient to reverse the current rate trend.
• Vessel deployment patterns suggest that space availability may vary by loop and port pair, with tighter conditions possible on selected sailings while overall market supply remains ample.

Other Market Drivers & Macro Developments

• Geopolitical developments in the Middle East continue to influence global shipping patterns. Recent progress in regional ceasefire discussions has reduced immediate uncertainty, prompting carriers to reassess routing strategies.
• Maersk has officially announced the resumption of Red Sea and Suez Canal transits on selected services. While the initial adjustment applies to specific loops, this development introduces the possibility of gradual normalization in transit times and vessel rotations if security conditions remain stable.
• Any broader return to Red Sea routing would have implications for global capacity distribution, equipment positioning, and schedule reliability on the Asia–Europe corridor.
• From a policy perspective, China has announced upcoming changes to export tax rebate policies affecting photovoltaic and battery-related products from April 2026 onward. While not an immediate driver for January or February shipments, these adjustments are expected to influence medium-term export flows and production planning.
• On the operational side, preparations for the Chinese New Year holiday are already impacting inland logistics. Reduced trucking and warehouse capacity ahead of the holiday is expected to create short-term pressure at origin, particularly during the final pre-holiday shipping window.

RS Logistics will continue to closely monitor rate movements, carrier capacity strategies, and external developments affecting the Asia–Europe trade. Our teams remain in active dialogue with carriers and local partners to provide timely, practical updates that support your planning and customer communication. Further insights will be shared as market conditions develop.

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