Hormuz crisis side effect: a sharp rise in container shipping rates

Recorded: May 30, 2026, 7 p.m.

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Hormuz crisis side effect: a sharp rise in container shipping rates :: Lloyd's List

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Hormuz crisis side effect: a sharp rise in container shipping rates

SCFI global composite index has doubled since the war with Iran began and is at its highest point since September 2024, during the Red Sea crisis
Bunker fuel costs have jumped by almost 70% and container lines are successfully passing incremental costs along to shippers
Shanghai-Los Angeles spot rates are up 59% vs late February, with Shanghai-New York rates up 66%, according to Drewry assessments

29 May 2026

Analysis

Greg Miller

@GMjournalist
[email protected]

Spot container freight rates continue their ascent as ocean carriers pass along much higher fuel costs resulting from the effective closure of the Strait of Hormuz. If the strait doesn’t reopen soon, the impact on container market could intensify

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Source: aerial-drone - stock.adobe.com
Asia-Med rates are still rising. Pictured: MSC Zoe in Piraeus.

IMPORTERS of containerised goods around the globe are paying more for their ocean transport as a result of the Hormuz crisis.
In yet another side effect of the Middle East war, container lines are successfully passing along fuel costs inflated by the effective closure of the Strait of Hormuz.
The Shanghai Containerized Freight Index global composite rose to 2,572 points in the week ending Friday, up 16% from the week before. It is now double its level in late February, just before the US and Israel attacked Iran.
This week’s SCFI global composite reading was the highest since the week of September 6, 2024, during the Red Sea crisis.

Impact of higher bunker fuel costs
“Geopolitical tensions in the Middle East are weighing on sentiment, with elevated bunker costs and fuel surcharges adding upward pressure across trade lanes,” said Drewry.
Maersk chief executive Vincent Clerc said in a conference call that his company is paying around $500m per month in extra fuel costs due to the Hormuz crisis “that we must find a way to pass through”.
Hapag-Lloyd chief executive Rolf Habben Jansen said that his company is paying €50m-€60m extra per week ($250m-$300m per month) and “rate increases have been roughly in line with the cost increase we have faced”.
When importers pay more for ocean freight, it is the same as “when you go to the petrol station and you have to pay a higher price”, said Habben Jansen.
Pass-along fuel costs may also be affecting peak season timing, further boosting spot rates.
“Demand is being pulled forward into June ahead of the expected July 1 bunker fuel adjustments, supporting stronger shipment flows,” said Drewry, citing “early peak season” trends in both the transpacific and Asia-Europe trades.
The average price of very low sulphur fuel at the top 20 bunkering hubs was $856 per tonne on Thursday, up 68% from mid-February, according to data from Ship & Bunker.
The average price of high sulphur fuel oil was $736.50 per tonne on Thursday, up 66% versus mid-February.

VLSFO pricing moves in line with Brent crude. The Brent price would decline if there is a peace agreement between the US and Iran, or surge if the Strait of Hormuz remains effectively closed for longer.
Neil Chapman, senior vice president of ExxonMobil, issued a blunt public warning on Thursday, asserting that the dated Brent price could spike to $150-$160 per barrel if the strait doesn’t reopen in the next few weeks.
If Brent goes higher, bunker costs — and shipper fuel surcharges — would also rise.
Disruption helps offset capacity overhang
The good news for carriers is that, so far, they have been able to offset fuel costs despite an ongoing flood of newbuilding capacity.
Their ability to do so relates, in part, to the Hormuz crisis.
Liners’ continued aversion to the Red Sea route amid the war in the Middle East reduces effective capacity by 12%, said Constatin Baack, chief executive of boxship lessor MPC Container Ships, on a quarterly call on Wednesday.
Slow steaming due to higher bunker costs has absorbed another 2% of capacity. “With energy prices up sharply, carriers have throttled back fleet speeds,” Baack said.
Port congestion takes out another 5% of capacity, bringing the total reduction of effective capacity to 19%.
“On paper, supply and demand have been diverging since 2023. The market should be trending toward oversupply,” said Baack. “In reality, rates have been increasing.”
According to Peter Sand, chief analyst at Xeneta, “Carriers entered the year facing a potential market collapse as services [were expected to return] to the Red Sea, but have ultimately found themselves able to charge higher and higher rates to shippers across the market.”
Asia-Europe spot rates
Different spot index providers use different methodologies and come up with different rate assessments, but they all show the same directional trend.
The SCFI Shanghai-Mediterranean index was at $7,500 per feu this week, up 63% versus the last week of February, just before the war began. It was the index’s highest reading since January 2025.
Drewry’s World Container Index assessed the Shanghai-Genoa spot rate at $4,253 per feu, up 50% versus late February.
Xeneta’s daily assessment of average short-term rates on the Asia-Med route was $4,326 per feu on Thursday, up 30% compared to pre-war levels.

The SCFI’s Shanghai-North Europe index was at $4,949 per feu this week, up 74% versus late February to its highest point since January 2025.
The WCI Shanghai-Rotterdam index was at $2,861 per feu, up 37% since before the war, and Xeneta’s Asia-North Europe assessment was at $2,880 per feu, up 30%.
“As the early peak season approaches and carriers continue to raise FAK rates, we expect rates to rise further in the coming weeks,” said Drewry.
Transpacific spot rates
US importers are now dealing with two policy decisions of US President Donald Trump: the attack on Iran and tariffs.
US importers continue to face steep tariff bills on top of rising freight costs due to fuel, even after the Supreme Court ruled against Trump’s emergency tariffs in February.
According to the Budget Lab at Yale, the current average tariff rate paid by US importers is 11.8%, the highest since the 1940s, excluding 2025. That is almost six times the 2% average at the beginning of Trump’s second term.
Nevertheless, US import demand remains resilient, supporting recent spot rate gains by carriers.
The SCFI Shanghai-US west coast index was at $4,149 per feu this week, up 129% versus late February. The SCFI Shanghai-US east coast index was at $5,333 per feu, up 100%.
A year ago, Asia-US spot rates were even higher, as that was the period when Trump gave a temporary tariff reprieve, allowing US importers to frontload.

The WCI assessed Shanghai-Los Angeles rates at $3,473 per feu this week, up 59% from late February, and Shanghai-New York rates at $4,597 per feu, up 66%.
“With early peak-season trends emerging and seasonal demand strengthening through June, we expect further upward pressure on [transpacific] rates,” said Drewry.
Xeneta’s assessment of average Asia-US west coast spot rates came in at $3,624 per feu on Thursday, up 74% versus late February. Xeneta’s Asia-US east coast assessment was $4,367 per feu, up 65%.
“There is no hiding place from this market turmoil,” said Sand.
“The June increases on the transpacific were driven mainly by the market mid-low [the midpoint between the low and the average], which are the rates generally paid by the larger-volume shippers who command greater negotiating power.”

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The disruption caused by the Strait of Hormuz crisis has directly translated into a sharp escalation of container shipping rates, creating significant financial pressure for importers globally. This increase is primarily driven by the successful practice of ocean carriers in passing incremental fuel costs onto shippers, stemming from inflated bunker fuel expenses resulting from the geopolitical tensions in the Middle East. Spot container freight rates have experienced significant ascent, with assessments from Drewry indicating Shanghai-Los Angeles rates up 59% and Shanghai-New York rates up 66% compared to late February figures.

Geopolitical volatility has added upward pressure to trade lanes by driving up bunker costs and fuel surcharges. For instance, major carriers reported substantial additional fuel expenditures due to these tensions; Maersk, for example, noted paying approximately $500 million per month in extra fuel costs attributable to the crisis, while Hapag-Lloyd reported extra weekly costs ranging from €50 million to €60 million. This mechanism means that the increased cost of fuel directly impacts the overall expense of ocean transport, mirroring the price increases experienced at fuel stations. Furthermore, the rising cost of bunker fuel, such as Very Low Sulphur Fuel Oil, is closely tied to Brent crude prices, creating volatility, with warnings issued regarding potential spikes if the Strait remains closed.

Market indices reflect this trend vividly. The SCFI global composite index doubled since the start of the war with Iran and reached its highest level since September 2024 during the Red Sea crisis, demonstrating the severity of the situation. Spot indices tracking Asia-Med routes also showed substantial growth; the SCFI Shanghai-Mediterranean index increased by 63% compared to late February, and various assessments on the Asia-US routes also showed sharp increases, up to 129% for the Shanghai-US west coast index.

In managing this turbulence, carriers have employed strategies to offset costs despite an influx of newbuilding capacity. A factor mitigating the rate increase is the reluctance of liners to use the Red Sea route due to ongoing conflict, which reduced effective capacity by 12 percent. Additionally, higher bunker costs have led carriers to implement slow steaming, which absorbed an additional 2 percent of capacity. When combined with port congestion, which removed another 5 percent of available capacity, the total reduction in effective capacity reached 19 percent. Analysts suggest that while supply and demand metrics might have indicated an oversupply since 2023, the actual market dynamic has favored carriers, allowing them to charge higher rates.

The divergence between supply and demand is evident in carrier behavior, as entities like Xeneta noted that carriers managed to command rising rates despite facing potential market collapse expectations. Looking ahead, the increasing pressure on spot rates is forecast to continue as the early peak season approaches and fuel surcharge rates are maintained or adjusted. Consequently, market expectations point toward further upward pressure on rates in the coming weeks across both transpacific and Asia-Europe trades. US importers also contend with external costs, such as steep tariff bills, which further compound the rising freight costs, adding another layer of complexity to the overall logistics environment.