Global Ocean Freight Rates Hit a Low, as Europe is Caught Between Port Congestion and Weak Demand

Global ocean freight rates have fallen to a 20-month low, yet European shippers are facing port congestion, Rhine River drought, and dismal consumer demand, according to the latest report from Transport Intelligence.

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While global ocean freight rates have slid to a 20-month low, shippers in Europe are grappling with a host of challenges including congestion at key ports, drought-related restrictions on the Rhine River, and subdued consumer demand. According to Transport Intelligence's (Ti) Q3 2025 Ocean Freight Tracker, both headhaul and backhaul rate indices continued their slide over the summer, highlighting a structural imbalance in the ocean freight market.

The headhaul rate index fell to 131.8 points in August 2025, down 11.4 points from May and 174.3 points lower than the same period last year. This is its weakest level since early 2024, extending a downward trend that began after the tariff-related disruptions of the first quarter.

A Contradictory Picture in Europe

During July and August, North European container hubs – including Rotterdam, Hamburg, and Antwerp – experienced significant congestion. Low water levels on the Rhine River continued to restrict barge operations, forcing vessels to operate at reduced capacity even as volumes were pushed inland. Although water levels have improved, inland capacity remains tight and is expected to continue so into Q4.

At the same time, throughput at the region’s ports has stagnated, with the regional port index falling to 88.6 in Q2 2025. Combined with labor shortages and weak household spending, this points to a very limited potential for recovery.

Global Factors: Tariffs and Oversupply

The volatility in Europe reflects global conditions. Transport Intelligence identifies three main forces shaping the market: erratic U.S. tariff policy, a massive wave of new vessel capacity, and fragile global demand.

Tariff front-loading in May and June created a short-lived rate spike on the Asia-U.S. trade, but by August, spot rates had plunged by 58% on the West Coast and 46% on the East Coast compared to June. Although carriers have responded with blank sailings, the amount of new capacity entering the market has quickly overwhelmed these measures. Global capacity has increased by 5.5% year-on-year, and the newbuild orderbook remains enormous, with new vessels equivalent to more than a quarter of the active fleet set to enter the market in 2026.

Advice for European Shippers

Based on its analysis, Transport Intelligence offers several pieces of advice for shippers in Europe:

• Expect congestion to persist: North European ports remain under pressure, with the Rhine drought and labor shortages adding to delays.

• Capacity will remain plentiful: Despite blank sailings, carriers will struggle to balance supply and demand. This creates opportunities to negotiate favorable contract terms, especially late in 2025.

• Secure space early for peak weeks: Although overall vessel space is abundant, sudden bottlenecks can arise. Booking ahead will mitigate risks.

• Monitor tariff policy closely: European trade flows are indirectly impacted by U.S.-China measures. Policy deadlines in October could shift volumes unexpectedly.

Outlook: Instability as the "New Normal"

Transport Intelligence concludes that the shipping industry is now in a "state of entrenched imbalance" rather than a temporary downturn. U.S. trade policy remains the biggest wild card.

• Transpacific: Facing one of the weakest peak seasons in recent years.

• Transatlantic: May find some stability, but demand remains fragile.

• Asia-Europe: Partially supported by Indian exports and Red Sea disruptions, but its resilience is reactive rather than structural.

Looking ahead, Transport Intelligence forecasts that Q4 2025 will continue to see downward pressure on rates, weak demand, and a persistent oversupply. By year-end, shippers will likely find ample vessel space and favorable contract terms. "Collectively, these conditions tell us that Q4 will be volatile and without a clear upside," Transport Intelligence notes. "The real challenge is perhaps not predicting a recovery, but adjusting to its absence."

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