A slowdown in cargo volumes would normally be expected to put pressure on shipping markets. Yet in 2026, the industry is experiencing almost the opposite effect: cargo growth is weakening, while earnings across much of the fleet remain exceptionally strong.
Speaking at Marine Money Asia in Singapore, Adam Kent, Managing Director of Maritime Strategies International (MSI), described the current market as a striking paradox. Over the past 12 months, almost every major shipping segment has moved in a positive direction despite the deterioration in overall cargo growth.
Kent pointed to several sectors that have been approaching their strongest levels since 2010. VLCCs, Capesizes, ro-ros and anchor handlers are all pushing towards historical highs, while roughly half of the shipping sectors tracked by MSI are operating at 80% or more of their historical peak. “There’s a very, very strong market across the majority of shipping currently,” he said.
That strength is emerging against an unusually weak cargo backdrop.
Kent explained that, once all cargoes are combined, global seaborne cargo growth could turn negative this year. According to a graph presented during his session, the decline is expected to be around 1%.
“If you aggregate all the cargo together, we could actually be in a negative seaborne cargo growth environment this year. It’s only the fourth time that’s happened in the last 40 years. So, we’ve got a bit of a paradox here: not that much cargo moving, but very, very high earnings,” he said.
The situation is being shaped heavily by geopolitical disruption. The most significant development over the past year has been the war in the Middle East and the sharp reduction in vessel transits through the Strait of Hormuz, a development that has played a major role in the negative cargo-growth picture.
But Hormuz is only one part of the wider disruption affecting global shipping routes.
The Suez Canal and Red Sea remain influenced by the security threat from Houthi attacks, which could result in fewer tanker movements through the region. At the same time, more container ships are once again using the Red Sea and Suez Canal after more than two and a half years of diversions around the Cape of Good Hope.
The Panama Canal has also returned to the shipping market equation. Restrictions on transits and vessel draughts linked to the impact of the El Nino effect are adding another layer of uncertainty to global routing.
Together, these choke-point disruptions are creating major inefficiencies across the shipping system. Cargoes are increasingly being sourced and transported over longer distances, increasing tonne-miles, reducing available vessel capacity and, in turn, pushing freight rates higher.
The most extreme example is currently the VLCC market. Spot rates have reached as much as $1.25 million per day for voyages transiting the Strait of Hormuz, reflecting both exceptionally tight market conditions and the additional security risks associated with the route. Large tankers are also achieving extremely high rates across other trading routes.
The question now is how much further those rates can rise.
During an earlier tanker panel at the conference, Henry Curra, Global Head of Research at Braemar, asked industry executives whether rates could continue climbing from their already extraordinary levels.
Benjamin Chan, Head of Commercial Assurance, Enterprise Risk and Portfolio Management at AET Tankers, was cautious about putting a figure on the potential upside.
“I don’t want to speculate and put a figure on it, but we are in uncharted territory, that’s for sure,” Chan said. In his view, the market cannot continue rising indefinitely because, eventually, cargo interests will reach the maximum they are willing to pay for freight.
“I don’t think the market will go rising forever, at some point the trade will reach the maximum willingness to pay for freight,” he added.
Chan nevertheless indicated that the market may already be approaching that ceiling.
“But I think it’s really quite close to the top,” he said.
Andreas Michalopoulos, Chief Executive Officer of Performance Shipping, also avoided predicting where the absolute peak might be. His assessment was instead framed around the market’s position relative to its extremes.
“Nobody can predict if we have hit the highest point, but we’re certainly closer to the highest point than the lowest point,” he said.
The result is a shipping market caught between two opposing forces: global cargo volumes may decline in 2026, but disruptions at critical maritime chokepoints are stretching routes, tightening effective capacity and driving freight rates and earnings to exceptional levels.
