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Container vessel utilization rates have fallen below 90% on many major shipping lanes, while the gap between freight rates and charter rates has reached a record high.

Data from Linerlytica shows that vessel utilization rates on three of the four major shipping lanes have fallen below 90%. According to Splash estimates, carriers can still maintain profits at current rates if the utilization rate reaches 80%. However, freight rates have continued to decline in 2025 due to a large number of new ships entering the market.

"The unabated demand for ships is keeping the charter market high despite the freight market slump," Linerlytica said in its latest report. Currently, charter rates compared to freight rates have reached a record 289%.

Linerlytica warned that if cargo demand does not recover to push freight rates up again, the chartering market could soon correct downward.

According to the latest report from Braemar, if shipping lines cannot stabilize freight rates, there is a high possibility of a large surplus of vessels being released to the market.

Container shipping industry profits plummet

Container shipping industry profits are forecast to fall by more than 80% in 2025.

According to Sea-Intelligence, the industry's total EBIT in 2024 will reach $60 billion, the third highest level on record and the highest outside the COVID-19 pandemic.

Leading container market analyst John McCown, head of Blue Alpha Capital (New York), predicts that shipping lines will still be profitable in 2025, but profits will fall below $10 billion.

Spot rates continue to fall

Container spot rates have been falling steadily in 2025. The Shanghai Containerized Freight Index (SCFI) is now down 47% from the start of the year.

Data from Drewry shows that rates on the Asia-North Europe, Asia-Mediterranean, and transpacific trades to the US East and West coasts are now lower than at any point in 2024.

However, compared to mid-December 2023 – just before the Red Sea shipping crisis:

• Asia-North Europe is still 74% higher.

• Asia-Mediterranean is still 96% higher.

• Trans-Pacific trades (US East & West Coast) remain 40% above their end-2023 lows.

According to Clarksons Research, the spot freight market continues to weaken due to:

• Lower than normal cargo volumes following the Lunar New Year.

• Increased competition among carriers as shipping alliances restructure.

• Uncertainty from a series of new tariff decisions by the US and its trading partners.