Insight Focus
Global container freight markets firmed in March–April. But this was driven less by demand growth than by geopolitical disruption, higher fuel costs and operational friction. Red Sea and Hormuz avoidance continues to absorb capacity and disrupt networks, offsetting weak trade growth outlooks. Despite heavy newbuild deliveries ahead, effective capacity remains tight for now, supporting rates.
In the near term, supply–demand fundamentals for container freight appear finely balanced but fragile. March–April rate firmness has been supported by operational friction and geopolitical risk, not a step‑change in global trade growth. In March, the IMF and WTO warned of slowing global growth and only low single‑digit trade expansion in 2026.
Looking forward, multiple analysts warn that any sustained normalisation of Red Sea transits would release significant capacity back into the market, exposing the scale of the orderbook and putting renewed downward pressure on rates. For now, however, the past month has shown that geopolitical disruption remains the dominant short‑term driver of container freight pricing and network behaviour.
Spot Rates Firm, Led by Transpacific and Transatlantic
Global container freight pricing firmed over the past month, reversing the softer tone seen immediately after Lunar New Year. Drewry’s World Container Index rose to around USD 2,300/FEU in early April, up modestly month‑on‑month, with gains concentrated on Transpacific and Transatlantic lanes.
Source: Drewry
Transpacific rates strengthened most visibly: Shanghai–US West Coast rose toward USD 2,900/FEU and Shanghai–US East Coast climbed above USD 3,600/FEU, supported by fuel surcharges and a contraction in effective capacity during April. Transatlantic pricing also surprised to the upside, with Rotterdam–New York rates jumping around 25% week‑on‑week in early April amid reduced sailings and seasonal tightening.
By contrast, Asia–Europe rates were mixed to slightly lower on spot, with Shanghai–Rotterdam falling back toward the low‑USD 2,300s even as carriers signalled higher FAK levels for late March and April loadings.
Fuel and War Risk Drive the Floor Higher
A key feature of the past month has been cost‑driven pricing pressure rather than demand‑led tightening. Escalating tensions in the Middle East, particularly around Iran and the Strait of Hormuz, pushed bunker fuel prices sharply higher and triggered emergency bunker and war‑risk surcharges across multiple trades.
Source: EIA
Carriers including Maersk, CMA CGM and COSCO moved to introduce or increase fuel surcharges during March and early April, raising the effective rate floor even where base freight rates softened. DHL notes that freight rate increases in early April were closely correlated with fuel volatility and capacity adjustments rather than a surge in cargo demand.
Rerouting Continues to Reshape Global Networks
Trade flows over the past month remained heavily influenced by continued avoidance of the Red Sea and uncertainty in the Strait of Hormuz. Most Asia–Europe strings continue to route via the Cape of Good Hope, adding 10–14 days to round‑trip times and absorbing an estimated 5–7% of global effective container capacity.
This longer routing has knock‑on effects well beyond Europe. According to Bertling, vessels and equipment are being redeployed from secondary trades (including intra‑Asia, Africa and parts of Latin America) into mainline Asia–Europe and Asia–US services, tightening availability elsewhere. In addition, there is congestion at Asian bunkering and transhipment ports including Singapore, Shanghai, Ningbo and Zhoushan as hubs continue to serve as overflow points surrounding the Middle East conflict zone.
On the demand side, Asia‑origin volumes rebounded seasonally after Lunar New Year, but without clear evidence of an exceptional surge. Transpacific eastbound demand was described as “stable rather than booming,” while Asia–Europe flows remained firm but increasingly price‑sensitive as European inventories stay relatively well stocked.
Nominal Capacity Growth vs. Effective Tightness
Structurally, the industry continues to face strong nominal capacity growth. Around 1.5 million TEU of newbuild capacity is scheduled for delivery in 2026. In addition, Linerlytica analysis shows that at the end of 2025, the total orderbook for newbuilds reached just over 11.7 million TEU, meaning the container orderbook sits near 35–37% of the active fleet, historically very high.
However, over the past month, effective capacity has remained tight. Longer voyages, blank sailings, speed adjustments and congestion linked to rerouting have kept vessel idling below 1% of the global fleet, allowing carriers to defend pricing despite the large orderbook overhang.
