Freight rates in container shipping extend upward momentum

The container shipping market is entering a new phase of rate increases, with the Drewry benchmark index rising for a fourth consecutive week, driven by the crisis in the Middle East and ongoing supply chain disruptions.

The Drewry World Container Index climbed 5% to 2,279 dollars per 40-foot container (FEU). The Straits of Hormuz remain a key factor shaping developments, as limited fuel availability, the stranding of containerships, and higher fuel and insurance costs are significantly pushing up freight rates—particularly on Asia–Europe routes.

On the Shanghai–Genoa route, rates surged 12% to 3,474 dollars per FEU, while rates to Rotterdam increased by 3% to 2,552 dollars.

Freight rates also moved higher on Asia–North America routes, with Shanghai–New York up 3% to 3,393 dollars per FEU, and Shanghai–Los Angeles rising 4% to 2,686 dollars, confirming broad-based pressure across the global market. According to Drewry’s Container Capacity Insight, three sailings on the Asia–Europe route and six on transatlantic Europe–U.S. services (East and West Coast) have been cancelled for the coming week.

Cancellations

These cancellations do not reflect weakening demand, but rather a deliberate capacity management strategy by carriers, combined with the operational pressures stemming from the Middle East crisis.

Meanwhile, France’s CMA CGM has announced higher FAK (freight-all-kinds) rates of around 3,500 per FEU, effective from April 1.

Stranded vessels squeeze capacity and drive up costs

At the same time, the liner market is under significant strain from containerships stranded in the Persian Gulf, reducing available capacity and further reinforcing the upward trajectory of freight rates.

Hormuz at the center

The Straits of Hormuz remain pivotal, having effectively been taken out of normal commercial operation since late February following the escalation of hostilities involving the United States, Israel, and Iran. Since then, vessel transits have been extremely limited, exacerbating congestion in the region.

According to the latest available data, more than 130 containerships remain immobilized in the Persian Gulf, with the list of affected vessels being continuously updated since March 24—underscoring the scale of disruption to global shipping.

Measures and synergies from Hapag-Lloyd

Hapag-Lloyd confirmed that six of its vessels, with around 150 seafarers on board, remain stranded in the area, with weekly costs estimated at 40–50 million dollars.

This effectively removes approximately 25,000 TEUs of capacity, according to CEO Rolf Habben Jansen, who also warned that the financial impact of the conflict remains difficult to quantify. Elevated costs are expected to persist into April, posing what he described as a “significant operational challenge.”

He added that rising bunker fuel prices, insurance premiums, and container storage costs have increased the company’s operating expenses by approximately 1 million dollars per day.

It is also noted that Hapag-Lloyd has stepped up cost-saving measures while leveraging partnerships, including its cooperation with Maersk, in an effort to mitigate the impact.