Container Freight Rates Stay High as LA-Long Beach Strike Looms

An early peak season that hasn't ended

Container shipping usually follows a set calendar. Retailers import holiday goods from August through October, rates rise, and then the market cools. In 2026 that pattern broke. The peak arrived months early, and by late October it still hadn't fully passed. At the same time, labor actions on both sides of the Atlantic are threatening ports that are already congested.

Drewry's World Container Index (WCI) is the clearest measure. It stood at $1,958 per 40-foot container in early March8. On October 22 it reached $4,585, its highest level in 15 weeks1. A week later it slipped 3% to $4,4293. Jefferies estimates that global container rates have risen about 130% since February. It ties the increase to Middle East tensions and puts current rates at roughly $4,000–4,500, up from $2,000–2,50030. Freightos reports that rates are already about 70% higher than a year ago27.

The US lanes have taken the biggest hit. In Drewry's October 22 assessment, Shanghai to Los Angeles was $8,007 per 40-foot container and Shanghai to New York was $10,1661. For comparison, Shanghai to New York cost $2,977 in early March8. Over about seven months, the cost of sending a box to the US East Coast has more than tripled.

How the peak came early

Accounts agree that the early peak had several causes. Analysts disagree mainly about how much weight each one carries.

The war that began with US and Israeli strikes on Iran on February 28 disrupted the Strait of Hormuz and pushed up fuel costs. Carriers responded with emergency fuel and war-risk surcharges21. Brent crude has stayed around $100 a barrel since early October, which keeps carriers' operating costs high5. US trade policy added to the pressure. A 10% global surcharge on US imports, in effect from February 24, prompted Asian shippers to send goods early in the first quarter and into the second24.

Companies preparing for the holidays did the same. Retailers restocked and brought holiday orders forward to get ahead of tariffs and fuel surcharges. That moved the usual peak demand into May and June22. Drewry was already pointing to early peak-season demand in May24. One analysis notes that the market never got the quieter stretch that normally comes before an August peak. High rates simply ran from June into October24.

Carriers also limited supply on purpose. One assessment found that they concentrated blank sailings (cancelled voyages) on the transpacific route while shifting ships away from Europe25. Drewry's weekly reports repeatedly mention carriers cancelling sailings to support rates, including 15 blank sailings announced for a single week in September4.

At this point the explanations start to differ. One reading holds that US demand has been resilient rather than exceptionally strong. It argues the rate surge comes mostly from a squeezed pre-holiday window and less usable capacity, not from a boom in consumption25. Import data supports that view. US imports in August were 2.60 million TEU (twenty-foot equivalent units), the third-highest month on record but only 3.3% above a year earlier25. Drewry's own commentary leans more on demand, saying strong US imports continue to support rates1. My reading is that the supply side is doing most of the work. Volume growth in the low single digits does not explain rates that have tripled. Detours, surcharges and carriers controlling capacity do.

Two very different markets

The headline index hides a sharp split between trade routes. While US-bound rates climbed, Asia–Europe rates fell for 12 weeks in a row through early October7. Shanghai to Rotterdam dropped from $4,933 in July21 to $3,337 by October 810. Drewry links the fall to more ships returning to the Suez Canal. Suez transits in late September were 68% higher than in the same week a year earlier, which adds usable capacity to the route7.

In late October, carriers tried to reverse that slide by cancelling more sailings and adding surcharges. Shanghai to Genoa rose 5% in the week to October 221. Drewry still describes the outlook as dependent on demand, capacity decisions and security in the region. Attacks on ships in the Gulf have cut container traffic there to a trickle1.

Trade commentary hasn't always kept these numbers straight. One manufacturing newsletter reported an October jump to $4,530 with Shanghai–New York at $7,90223. Those figures don't match Drewry's published October readings, which put New York above $10,00010. Shippers setting budgets should use the index series directly rather than secondhand summaries.

Strike threats meet congested ports

Labor actions are now adding risk on top of high rates.

The more serious threat for US importers is in Southern California. About 250 watchmen in International Longshore and Warehouse Union (ILWU) Local 26 have authorized a strike that could start at 5 p.m. Pacific on Sunday, November 1, at the ports of Los Angeles and Long Beach17. The group is small, but its reach is large. These workers make up about 2% of the ILWU workforce at the two ports. However, they work at terminals that handle roughly 85% of Long Beach's cargo and 33% of Los Angeles's13. The Pacific Maritime Association (PMA), which represents employers, expects other ILWU members to refuse to cross picket lines. That could stop vessel, yard and gate operations at the affected terminals19.

The dispute has been going on for some time. Local 26's previous contract expired in July 2025, and talks have continued for more than a year with federal mediators19. The PMA says full-time watchmen earn an average of more than $170,000 a year15. The coastwide ILWU longshore contract is separate and runs through 202817, so this is a narrow dispute that could have broad effects.

The timing makes it worse. Los Angeles and Long Beach together handled a record 2.04 million TEU in September19. As of October 26, nearly 35,700 import containers were waiting for trains at the two ports. More than 10,500 of them had been sitting at terminals for at least nine days20. Los Angeles was hit harder: 41.4% of its rail-bound containers had passed that nine-day mark, compared with 15.1% at Long Beach20. The two ports handle 31% of US seaport container traffic13. Even a short gate closure would add to a backlog that already threatens holiday deliveries to the eastern US17.

In Europe and beyond, the strike is political rather than about pay. Dockworkers in 22 countries planned stoppages on October 30 to protest the use of ports for arms shipments. More than 25 unions at 113 ports backed the action, including hubs such as Hamburg, Valencia, Le Havre, Piraeus, Genoa, Tangier Med and India's Nhava Sheva11. Organizers said the action could disrupt more than 40% of Mediterranean cargo and hold up more than $2 billion in freight14.

Reports differ on how much it will actually disrupt. Genoa's port expected only limited impact. Piraeus warned mainly about ferry services, and its dockworkers planned a three-hour morning stoppage rather than a full shutdown14. Some unions planned 24-hour walkouts, while others planned shorter stoppages or symbolic protests12. My assessment is that this is a one-day event that will add delays without changing rates. Still, it shows that port labor has become a recurring source of disruption, especially in Italy. Livorno dockworkers, for example, refused to handle a vessel they linked to a US military base earlier in October16.

Higher costs beyond the port

The extra costs don't stop at the port. A Q4 freight index from TD Cowen and AFS Logistics projects record ground parcel rates, 43.3% above a January 2018 baseline. It forecasts truckload rates at their highest since early 2022, and less-than-truckload (LTL) rates above 80% of baseline for the first time28. Fuel, tight capacity and holiday surcharges are the main drivers28. Werner Enterprises executives say tighter regulatory enforcement is cutting trucking capacity and expect rates to keep rising through year-end29.

For importers, the contract rate is now only part of the bill. General rate increases, bunker (fuel) adjustments, peak-season surcharges and emergency fuel surcharges can all be added on top of contracted rates24. CMA CGM, for example, introduced peak-season surcharges on Far East–US cargo from October 126.

What comes next

There are a few reasons to expect some relief. Freightos expects US import volumes to dip in October and fall more sharply in November and December27. Drewry noted only two transpacific blank sailings planned for the week after October 22, which points to more usable capacity1. Ship waiting times at Shanghai have also dropped from 97 hours to 381.

The forces that pushed rates up are still in place, though. Hormuz is still disrupted, oil is around $100, tariff policy is unsettled, and carriers have shown they will cancel sailings to protect prices. Freight costs are unlikely to fall back to the low levels of late 2025. The most likely outcome is a slow decline from high levels, with occasional jumps whenever a strike, an attack or a policy deadline cuts available capacity. In the short term, the key question is whether the Los Angeles–Long Beach talks reach a deal before Sunday evening.