Keeping up with global trade can feel like trying to hit a moving target. Between surprise diplomatic deals in Davos and new tariff hikes across Mexico, the ‘standard’ way of moving freight is changing regularly.
To help you make sense of it all, we’ve pulled together the most critical updates. Here is what you need to know to keep your supply chain moving smoothly.
Mexico market update: Tariff pressures and shifting trade flows
The Mexican economy continues to be influenced by high U.S. tariffs. Since March 2025, a 25% duty has been imposed on imports from Mexico into the United States, with additional Section 232 tariffs particularly affecting automobiles and auto parts, as well as steel, aluminum, and copper.
These measures have weakened Mexico’s competitiveness relative to the EU and Japan, contributing to a slowdown in industrial production. In the third quarter of 2025, GDP contracted by 0.3%, led by declines in the automotive, metals, and chemical sectors, while investment and consumer spending remained subdued.
The impact of these duties is clearly seen in the automotive industry. The Mercedes-Benz and Nissan joint venture will cease production in Mexico in 2026, as manufacturing has become uneconomical under the current US tariff structure.
In cross-border trade, the struggling automotive sector has led to fluctuating demand, unstable truck utilization, and volatile freight rates. However, exports in other areas, such as electronics, remain stable and continue to support overall trade activity.
New tariff regulations for imports into Mexico
As of 1 January 2026, Mexico has implemented significant increases to its general import tariffs (MFN/WTO rates). In some instances, duties have risen by 35% to 50% for products from countries without a standing free trade agreement.
The affected categories are broad, covering critical supply chain components such as auto parts and plastics, alongside textiles, furniture and various consumer goods.
Germany remains in an advantageous position due to the EU–Mexico Free Trade Agreement (FTA). As long as goods comply with the established rules of origin and are properly certified (e.g. EUR.1) the higher MFN tariffs do not apply. This allows German imports to maintain their competitive edge.
Impact on container imports and trade flows
For 2026, a moderate economic recovery is expected. This is supported in part by higher minimum wages and shifting trade flows resulting from the new tariff environment.
Container services to Mexico’s East Coast are currently well booked with carriers such as Maersk and OOCL. However, with timely planning, sufficient space remains available for upcoming shipments.
Freight rates are currently at a low level and are expected to remain stable in the near term, provided the economic and political environment remains stable.
US-Europe market update: Between confrontation and cautious easing
Transatlantic relations have recently come under renewed pressure. US President Donald Trump had threatened several European countries with punitive tariffs (initially 10% from 1 February and potentially 25% from June) if they did not support his demands for a stronger US role in Greenland.
This prompted a noticeable shift in the European Union’s stance. For the first time, Brussels signaled a unified and assertive response, with possible measures including the reactivation of suspended retaliatory tariffs worth €93 billion and the deployment of the “Anti-Coercion Instrument”, the so-called ‘trade bazooka’.
However, a potential tariff conflict would harm both sides. The economies of Europe and the United States are closely interconnected, particularly in technology, software, and financial services.
For Germany, the impact of existing US tariffs is already clearly visible. Exports to the United States have fallen sharply, foreign trade has been shrinking for several years, and economic growth has been noticeably dampened.
Just before further escalation, a surprising rapprochement took place at the World Economic Forum in Davos. President Trump and NATO Secretary General Mark Rutte agreed on the basis for a ‘Greenland deal’. As a result, announced US tariffs against several European countries are now expected to be avoided.
Reports indicate the agreement includes no new tariffs, a revision of US military basing in Greenland, greater US influence over investments, and stronger engagement by European NATO members in the Arctic. European governments have welcomed the move but remain cautious as they wait to see how the agreement is implemented in practice.
Impact on container shipping
For container shipping between Europe and North America, this development brings short-term relief. Freight rates remain stable at a low level until the end of the first quarter of 2026.
Capacity is widely available, offering shippers favorable conditions and attractive long-term contract opportunities. At the same time, operational bottlenecks at key ports such as Rotterdam and Antwerp are causing longer container dwell times and increasing the risk of demurrage and detention charges.
If political tensions were to escalate again, trade barriers could dampen cargo volumes and reduce planning certainty. If the current easing persists, however, shipping lines and shippers are likely to benefit from stable demand, ample capacity, and continued moderate freight rates.
Container shipping therefore remains a sensitive early indicator of the future direction of transatlantic relations.
Europe – SAWC market update: Modest growth amid regional political shifts
The South American West Coast (SAWC) enters 2026 with an average growth forecast of 2.3%. While Chile and Peru benefit from surging global demand for copper and critical minerals linked to the energy transition, the region faces ‘old growth constraints’ including sluggish domestic consumption and high financing costs.
Investment sentiment is currently marked by ‘election-year caution’ in Chile and Peru, with business leaders awaiting regulatory clarity. For European exporters, the Mercosur-EU dynamics remain a pivotal focal point; however, the immediate trade flow is driven by industrial machinery and chemical imports required for the Andean mining boom.
The Euro’s relative strength against the Chilean Peso and Peruvian Sol has slightly dampened the ‘affordability’ of European consumer goods, but industrial demand remains inelastic.
Sea freight market update
The Europe-to-WCSA trade lane remains one of the more stable global corridors. While East-West trades grapple with extreme volatility, SAWC benefits from a steady balance between industrial imports and seasonal agricultural exports.
However, the global “vessel deluge” of 2026, with fleet growth at 3.6%, is exerting downward pressure on base rates.
The most significant change for Q1 2026 is the phase-in of the EU ETS. Shippers are now seeing substantial carbon surcharges; for example, MSC is quoting approximately €98 per TEU for Europe-to-SAWC routes.
Spot rates have remained relatively flat through the first half of Q1 2026, avoiding the sharp corrections seen in Asia-Europe trades. Carriers are currently prioritizing the repositioning of empty equipment to support the South American peak export season for fruit and perishables.
Port status
Operations at San Antonio and Callao are broadly stable, with yard levels remaining under control. However, Iquique has implemented import restrictions of a maximum 950 boxes per call through February 2026 due to a high yard occupancy of 94%.
In Ecuador, terminal productivity at Guayaquil remains consistent, with berth waiting times typically staying under 12 hours.
At European gateways, winter storms and ice throughout January and February have caused terminal “bunching” in Hamburg and Antwerp. This has led to southbound delays of 3–5 days, impacting arrival reliability in WCSA.
Outlook
The second quarter of 2026 is expected to see a seasonal transition alongside continued global overcapacity. Rates will likely soften as the primary fruit export peak from Chile and Peru winds down, releasing more vessel space back into the market.
- Rate Forecast: Expect “all-in” costs to remain elevated due to the EU ETS and potential increases in bunker surcharges. However, base freight is likely to see a 5–10% decline as global capacity continues to exceed demand.
- Logistics Strategy: Shippers should consider port diversification to mitigate localized disruptions. Utilizing alternative gateways, such as Lirquén or Arica, may help avoid yard occupancy issues currently affecting main hubs like Iquique.
Europe – Asia (eastbound) market update: H1 resilience
The European export economy to Asia enters Q1 2026 in a state of ‘stagnant resilience’. While the broader German and Dutch manufacturing sectors are struggling with high energy costs and a cautious 1.8% GDP growth, ‘Eastbound’ demand for specialized high-tech machinery, luxury perishables (specifically high-end dairy and meats) and pharmaceutical products remains steady.
In China, consumer demand remains subdued as the real estate sector continues its long deleveraging. However, ‘green technology’ components and AI infrastructure from Europe are seeing a 4.5% uptick in volume compared to Q4 2025.
The strengthening of the Euro against the Yen and Yuan has, however, made European products slightly less competitive in the broader consumer markets of Japan and Southeast Asia.
Sea freight market update
The Europe-to-Asia trade lane, traditionally the “backhaul” leg, is defined in February 2026 by extremely low freight rates and a desperate need for equipment repositioning. With the Lunar New Year (Feb 17) effectively shutting down Asian factories, the focus for carriers in Europe has shifted from profit-per-container to ‘flow-management’.
- Oversupply pressure: The global fleet has grown by 3.6% in 2026, with mega-vessels (>24,000 TEU) now common on the North Range-to-Asia rotations.
- Red sea ‘drip-feed’: Some carriers (notably CMA CGM, Maersk, and Hapag-Lloyd) have begun testing Suez transits for Eastbound voyages first. The lower cargo value and reduced risk on the backhaul make it an ideal testing ground for returning to the shorter route.
- European gateways: Heavy snowfall and ice in Northern Germany and the Benelux region in January and February have caused rail and barge backlogs. Exports from Hamburg and Rotterdam are seeing average delays of 3–5 days due to slower terminal operations.
- Feeder Reliability: Schedule reliability for feeder services into the Baltics and Scandinavia has dropped to 42%. This is causing a ‘bunching’ effect when cargo finally reaches the main export hubs for Asia-bound loops.
- Blank sailings: Post-Lunar New Year, carriers are significantly reducing capacity to prevent a complete price collapse.
- Capacity Cuts: Alliances have announced a 12% reduction in Eastbound capacity for the second half of February and early March.
- Operational Strategy: Carriers are using these ‘void sailings’ to catch up on schedules delayed by the Cape of Good Hope detour.
Outlook
The second quarter of 2026 is expected to be a transition period. If the ‘Suez Return’ tests prove successful, the industry will see a massive surge in effective capacity as transit times drop by 10–14 days.
- Rate Forecast: Expect Eastbound rates to remain at current floor levels. Any attempt at a General Rate Increase (GRI) in April or May is likely to fail unless consumer demand in China sees a sudden, significant recovery.
- Operational Risk: The ‘Double Arrival’ risk is real. Vessels returning through the Suez Canal and those finishing the Cape detour may arrive in Asian ports simultaneously in late March. This could potentially cause a secondary congestion wave in Singapore and Shanghai.
Europe – India (eastbound) market update: A “new era” for exports
The signing of a historic Free Trade Agreement (FTA) on 27 January 2026 signals a new era for European exports. After nearly 20 years of negotiations, the EU and India have concluded what is being called the ‘mother of all trade deals’, creating a free trade zone encompassing 2 billion people.
The agreement aims to double EU goods exports to India by 2032. Key beneficiaries of this landmark pact include the German and Italian machinery, automotive, and chemical sectors.
Furthermore, zero-duty access for medical equipment and green tech components supports India’s ‘China+1’ diversification strategy, positioning European industry as a critical partner in India’s structural transformation.
Sea freight market update
The Europe-to-India (Eastbound) trade lane is entering a transition phase. While India-to-Europe (Westbound) rates have seen sharp spikes due to reefer peaks, the Eastbound leg is being driven by a surge in industrial project cargo and machinery following the historic FTA announcement.
Port status
- India Hubs: Port stay durations at Nhava Sheva and Mundra remain efficient in early February 2026. Terminal productivity is high, though yard utilization is beginning to rise as the first waves of FTA-related cargo arrive at these gateways.
- European Gateways: Heavy snowfall and ice in Northern Germany and the Benelux region throughout January and February have caused significant rail and barge backlogs. Exports from Hamburg and Rotterdam are seeing average delays of 3–5 days due to slower terminal operations and reduced landside productivity.
Outlook
The second quarter of 2026 is expected to bring a massive influx of ‘effective capacity’ if carriers fully resume Suez transits, creating a potential ‘rate cliff’ and capacity surge.
- Capacity Surge: Shorter transit times via the Suez Canal effectively inject 15–20% more capacity into the market without adding new vessels. This is likely to lead to a sharp rate correction in late Q2.
- Free Trade Agreement Implementation: While the deal is signed, legal scrubbing and ratification will continue through 2026. However, ‘early-mover’ shippers are already increasing volumes to secure warehouse space in Indian SEZs (Special Economic Zones).
Looking ahead
While the current market shows some signs of stability, there is still plenty to stay on top of as we head further into the year. The ‘double arrival’ risks in Asia and the full implementation of the EU carbon emissions trading scheme mean that the landscape is quickly evolving.
The key to a stress-free quarter is staying ahead of the market and choosing the right routes before bottlenecks form. If you want to navigate these changes with a logistics partner who stays in the loop, just reach out.
