The new downward cycle in container shipping shares similarity with past downturns in that the primary driver is overcapacity. But there are differences.
The demand-side slowdown is new in that some of it stems partly from geopolitics and a fragmentation of countries between different, tariff-free blocs of trading partners. This will require carriers and others to be agile and adaptable in following these shifts — which they will do.
The normalization of consumer demand post-pandemic was always going to temper container traffic growth, but that process has been disrupted by the dramatic shift in US trade policy. There are another three big differences between the current and past downturns.
First, carriers are much better placed to weather the next downturn as they have far healthier balance sheets and cash reserves than in 2009 and 2016. Paradoxically, this is also why overcapacity has gotten out of hand through excessive newbuild ordering.
Second, there are fewer major carriers these days, following consolidation post-Hanjin Shipping bankruptcy. In 2009, there were 21 major carriers competing on the East-West routes. In late 2025, there are only 12 major East-West carriers left (or 11, if you count Cosco and OOCL as one carrier group). This means fewer decision makers — enabling more streamlined and coordinated response to match supply with demand — and fewer responses to shippers’ bids.
Finally, the carrier industry’s management attitude has matured. Drewry expects carriers to reduce rates to keep market share and try to fill their ships, as they always do in times of down cycles (which I remember well, as a former carrier executive). But I believe that the old mentality of some carriers to deliberately target and undermine one of their competitors with “destructive pricing” has gone. As I was once told, the previous “I will bury you” mentality of some carriers in the past has gone. This must be welcome.