The latest world port volumes index in Q2 2025 is a story of regional divergence. North American volumes dropped to 139.2, 0.4 points less than last year and a sharper 4.03 points quarter on quarter from 143.3 in Q1. Europe, by contrast, showed the reverse trend: a modest year-on-year fall of 1.4 points, from 90.0 to 88.6, but a quarter-on-quarter gain of 1.0 point, up from 87.5 a quarter ago. Asia, however, drove global growth, as its index rose to 123.0 in Q2 2025, an increase of 5.9 points on 117.1 in the previous year and 3.9 points on 119.0 in Q1 2025, continuing its upward trend.Globally, the index climbed to 121.9, up 3.3 points from 118.6 compared to the same quarter last year, a much bigger increase than the six-year average quarter’s increase of 1.8 points. Quarter by quarter, the growth was more modest at 1.5 points from 120.3. Looking closer at US East Coast volumes, initially, the threat of tariffs did appear to stimulate activity, as shippers pre-loaded cargo prior to implementation schedules, artificially inflating volumes and driving the initial phase of the rebound. That short-term lift is now over, with tariffs applied, the cost pressures are beginning to dampen demand, pushing volumes down.Throughout Q3 North American ports saw an artificial lift, which was down exclusively to importers rushing goods ahead of tariffs and pushing imports up 18% year-on-year in July. During that period, LA handled a million containers in a single month, though executives there and at Long Beach believe there is now an excess of inventories that will see volumes drop by 10%. Of course, tariff uncertainty remains pervasive. Reciprocal duties took effect on August 1, India specific levies were introduced on August 7 and the US – China truce expires on October 15. And with high interest rates and weakening and fragile consumer demand, Q4 looks points to softer throughput for North American ports. Congestion, meanwhile, remains a problem for Europe, with July and August being particularly difficult for Rotterdam, Hamburg and Antwerp. The Rhine River drought has also forced barges to operate at reduced capacity, and though water levels have improved, capacity remains tight and will be so in Q4 3. Elsewhere labor shortages and lackluster economic growth signal only modest growth for Europe for the remainder of the year. By contrast, Asia has motored. Port indices in China were up 4.5% year-on-year in May, and July throughput at many Chinese and South-Asian ports climbed on tariff-related front loading. It’s not all sunny however – weather disruptions, looming tariff uncertainty and high inventory costs will likely moderate growth later in the year. In that respect, the global port index is expected to plateau or fall quarter-on-quarter for Q4 2025 and will likely only remain above last year’s level because of the strong performance in Q3.GLOBAL SUPPLYMonth-on-month, global capacity has increased minutely by 0.4% from 1,242,956 TEUs in July 2025 to 1,248,267 TEUs in August 2025. While the Fareast Europe and transatlantic lane saw a decline we witnessed an increase on the transpacific lane. In the long run we observe that global ocean freight capacity has increased year-on-year by 5.5% from 1,147,365 in Q2 2024 to 1,211,208 TEUS in Q2 2025, however quarter-on-quarter we see a decline of 0.3% from Q1 2025 capacity at 1,215,596 TEUs. If global capacity continues to increase over the months, it might exert a downward pressure on rates.Throughout the rest of the year the container market will remain oversupplied, with any seasonal surge highly unlikely to offset the influx of capacity. Earlier this year the global fleet reached 3.18m TEUs and is continuing to expand with an order equal to more than a quarter of the current active fleet. Although Q2 saw a minor quarter-on-quarter drop, it was down to disruption rather than a slowdown – as indicated by rising capacity in July-August.Global demand is generally muted. In the US, for example, the National Retail Federation forecasts import volumes to fall by as much as 21% between August and November, indicating that the tariff-driven surge in July marked a peak. With North American consumers already well stocked and weak demand in Europe limiting recovery, carriers are cutting capacity through blank sailings, service suspensions, and smaller ships. Indeed, on both US coasts capacity is predicted to drop by 6.2 % and 1.7 % respectively, leaving ample space on most trade lanes. Capacity will remain plentiful and blank sailing prevalent. The imbalance between supply and demand should push rates lower. Transpacific are more than likely to stay flat, while Asia-Europe will be stable, and transatlantic conditions soft. Unless a major disruption removes a large amount of tonnage, overcapacity is going to persist through the final part of 2025, keeping rates under pressure for the foreseeable.GLOBAL OUTLOOK AND CONCLUSIONWhat should be clear as we enter Q4 is that the industry is in a state of entrenched imbalance rather than a cyclical downturn. What distinguishes the former from the latter is not the oversupply or weak demand – both are features of the market – but the degree to which they are being amplified by volatile trade policy and the resulting shifts in consumption. Against that backdrop we can expect three converging forces to exert pressure over the next six months. The most obvious and pressing thing remains US trade policy, which is as erratic as it is unpredictable. The lack of clarity has made forward planning highly impossible and has put the frighteners under markets. Across the Transpacific trade in particular, importers front loading has left warehouses well stocked and carriers facing the weakest peak season in recent memory, while on the Transatlantic stability is fragile and tied to restocking rather than genuine demand.Asia-Europe is more insulated by Indian exports and Red Sea related constraints, but even so resilience still looks more reactive than structural. Elsewhere, the supply side is compounding the challenge. Record newbuilds will flood the market in 2026, ensuring that excess tonnage will continue to be a defining feature of the industry.Carriers will shuffle networks and use selective redeployments to cope short-term and in the absence of systemic corrections. It’ll be a buyers’ market for shippers who will have to contend with patchy reliability and thinner effective capacity than nominal fleet numbers suggest.Finally, consumer demand appears unlikely to provide relief in key markets. Sentiment is sliding in the US as tariffs push up costs and inflationary pressures re-emerge. Europe is showing signs of improvement through stabilizing retail volumes and PMI readings, though household spending remains constrained by interest rates. Asia is mixed, as Chinese exports continue to be externally reliant, while India’s growth provides a silver lining to the region. That alone is unlikely to offset wider weakness though. Collectively, these conditions tell us that Q4 will be volatile and without a clear upside signal. Rates will be tied to restocking and carrier tactics, with a flat or downward trajectory.In Q1 2026, the structural imbalance will deepen as new tonnage enters the market, locking in lower rate ceilings and pushing the balance of power further toward shippers. What is interesting here is that the weakness isn’t uniform, and, moreover, each region has its isolated stabilizers – the disciplined capacity management on the Transatlantic or India’s export strength. In the absence of systemic solutions, they offer a certain kind of resilience, and in the absence of a demand catalyst they suggest a way forward. With that in mind, the real challenge is perhaps not predicting a recovery but adjusting to its absence.
