The global shipping industry is entering 2026 firmly as a shipper-driven market, shaped by a widening supply–demand imbalance and easing freight rates, according to an industry outlook shared by Supal Shah, CEO of Sarjak Container Lines.

“While freight rates are expected to normalize sharply from recent highs, the industry is unlikely to return to pre-crisis stability due to persistent geopolitical, regulatory, and environmental risks.” Shared Supal.

“2026 will bring relief on rates, but not certainty,” said Supal Shah. “Oversupply is structural, costs are permanently higher, and volatility is now a feature, not a phase, of global shipping.”

Market Dynamics & Freight Rates

The sector is transitioning into a period of structural overcapacity, placing sustained downward pressure on freight rates across most segments.

• Capacity Overhang: Global fleet capacity is projected to grow by 3.6%–5% in 2026, significantly outpacing demand growth of 1.5%–3%, according to industry forecasts.

• Orderbook Pressure: The global container ship orderbook currently stands at 26–28% of the existing fleet, one of the highest levels seen in more than a decade.

• Rate Outlook: Average global spot freight rates are expected to decline by up to 25% year-on-year, while long-term contract rates may fall by 8–12% as shippers regain negotiating leverage.

• Profitability Impact: Industry-wide profitability is expected to weaken materially, with several analysts forecasting losses of up to USD 10 billion in 2026, driven by falling revenues and structurally higher operating costs.

Segment-Specific Outlook

Performance across shipping segments is expected to diverge significantly:

Container Shipping: Fundamentals are likely to deteriorate further due to oversupply, easing port congestion, and the potential return of vessels to Suez Canal routings, which would release additional effective capacity.

Tanker Shipping: Crude and product tanker markets are expected to remain resilient, supported by steady end-demand, OPEC+ supply adjustments, and longer average voyage distances that keep tonne-mile demand elevated.

Dry Bulk: The sector is expected to remain weak but stable, with potential upside if global trade volumes recover or geopolitical tensions ease.

LNG & Car Carriers: These segments are likely to remain broadly stable, underpinned by long-term contracts, energy transition dynamics, and steady vehicle trade flows.

Key Risk Factors to Watch

Several structural and geopolitical variables could materially alter the market trajectory:

Suez Canal Reopening: A broad return to Suez Canal transits could reduce effective global vessel demand by up to 10%, as shorter voyages free up capacity.

Geopolitics & Trade Policy: Rising trade protectionism, evolving U.S. tariff regimes, and shifting supply chains remain key uncertainties that could disrupt established trade lanes and dampen demand for higher-margin cargo.

Environmental Regulation: From 1 January 2026, the EU Emissions Trading System (EU ETS) moves to 100% emissions compliance, adding permanent cost structures to Europe-linked trade lanes and accelerating cost pass-through to shippers.

Technological & Operational Shifts

In response to sustained volatility, both shippers and vessel owners are reshaping operating models:

Digitalisation: Shippers are increasingly adopting continuous rate governance, real-time pricing analytics, and AI-driven procurement tools, moving away from rigid annual contracting cycles.

Sustainability & Fleet Strategy: Vessel owners are prioritising lifecycle optimisation, fuel flexibility, including LNG, methanol, and biofuels, and energy-efficiency investments to meet tightening decarbonisation targets while preserving asset competitiveness.

Outlook Summary

“While 2026 is expected to bring lower freight rates and improved cost visibility for shippers, the global shipping industry remains structurally fragile. Oversupply, regulatory costs, and geopolitical uncertainty will continue to define a market that is less crisis-driven, but far from stable.” Shared Supal.

“For shippers, this is a window of opportunity,” Shah added. “But success in 2026 will depend on smarter procurement, better data, and the ability to navigate risk, not just lower rates.”
Source: Sarjak Container Lines