The Merchant · n°212 · October 29, 2026

The Merchant - Shippers under pressure, AI squeezes air freight space

Figure of the week

4.7%

The IMF has predicted that world trade volume growth will slow from 5% in 2025 to 4.7% in 2027. Sea-Intelligence has warned that this will add to the mismatch between supply and demand as more capacity comes to market.

Quote of the week

“If the situation continues with a high level of attacks, we might well see bunker fuel eventually exceed the peak from March.”

Vespucci Maritime chief executive Lars Jensen warns shippers to expect rising bunker fuel surcharges in Q1 2027 as attacks on tankers in the Strait of Hormuz mount.

Shippers feel the pressure from rates and regulations

US shippers are increasingly feeling the weight of government action on their backs after two years of tariffs. That was JOC.com’s conclusion after hearing comments from two dozen shippers at an unnamed industry event in September. US importers at the event even went as far as to say that they felt “a target on their backs” as a result of federal government pressure on importers. High container spot rates over peak season have strained budgets. At the same time, many shippers feel they have relatively little leverage as they head into the next annual round of service contract negotiations. Shipping consultant John Monroe recently wrote in his weekly newsletter that shippers were also finding it harder to negotiate down peak season surcharges. Some shippers are complaining that ocean carriers are pushing through the surcharges, even when the paperwork technically disallows them. One of the biggest complaints has been the increased weight of federal regulations. On the one hand, these are bleeding into higher inland costs, a result of new regulations pushing up trucking and drayage rates. On the other hand, President Donald Trump’s order to CBP to tighten enforcement has led to greater delays. More importantly, for many shippers, it means they are having to devote more time and resources to paperwork. One new CBP requirement is increased disclosure of non-US paperwork. “If you require every importer to collect the exact foreign export declaration, small businesses will be hurt. We do not have direct contact with foreign filers. It takes weeks to get it,” said Adeola Jayeola, founder of EcoWise Logistics. “This will push small businesses out of direct importing.” Record port congestion in Asia has also had a negative effect on reliability figures, especially to the US West Coast. The big question is exactly when anticipated overcapacity will start to give shippers more negotiating power. With increasing numbers of carriers returning to Suez routings, most analysts are anticipating overcapacity will start to tell in 2027. At the same time, carriers are planning vessel scrapping, slow steaming and increased blank sailings to help prop up rates. The market may seem to be tilting in favor of shippers. But they should not necessarily expect it to be plain sailing in 2027.

AI demand creates headache for air freight shippers

Peak season has well and truly arrived for US air freight shippers as Shanghai to US West Coast rates hit a record this year. China-US data from Freightos showed rates were up 27% since the end of September. Demand is mainly being driven by AI-related infrastructure, but general high-tech products and inventory restocking are contributing. Industry analysts are predicting that high volumes will continue well into 2027. The worry for shippers now is what happens if the AI hyperscalers increase volumes. That could leave them fighting for space and push rates significantly higher. As TAC put it: “With AI infrastructure buildout speeding up, how much capacity will the big tech players lock up directly through charters and block space as they enter the market?” “If they move in a big way during Q4, a tight market could get tighter still, and the space left for everyone else could be priced very differently.” Smaller shippers should watch the market carefully to avoid being caught in the middle.

Fresh typhoon creates new wave of delays

Just as Asian ports were starting to shrug off the effects of a series of typhoons, the strongest storm yet has hit Taiwan and set back the recovery. Typhoon Champi made landfall in Taiwan last week and was rated the strongest storm of 2026. This helped support container freight rates, disrupted vessel schedules and caused a new round of delays. Taiwan’s key ports temporarily closed in response to the storm, and some ships were delayed by up to three days. According to Linerlytica, Champi has added to congestion in North Asia. “Ports across Southeast and South Asia remain under pressure from vessel bunching,” the consultancy said. “The situation is compounded by the return of some services through the Suez Canal, as ships resuming the shorter route converge with vessels still sailing around the Cape of Good Hope. “These disruptions are temporarily absorbing effective capacity and offering some support to spot rates.” However, Champi is only likely to offset the post-peak season lull for so long. Carriers have scheduled a GRI for November 1. But it looks unlikely to stick. Linerlytica added: “Carriers’ plans for a GRI on November 1 are effectively doomed as the winter slack season kicks in, with the largest shipping lines undercutting each other.” Anecdotal evidence already suggests carriers are prioritizing securing volumes over maintaining higher prices. And the shift towards resuming Suez Canal transits is likely to add extra capacity to markets. Shippers then may experience temporarily higher rates than expected, but the market should start to slacken as the effects of Champi recede.

Did you know?

The US is reportedly considering extending a pause on charges for China-linked ships calling at American ports by two months. The bilateral truce was set to expire in early November, but now the USTR is reported to be considering extending the truce to reflect bilateral trade talks.

Sources

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