Global container freight rates moved higher this week as export activity across Asia began recovering after the Lunar New Year slowdown. However, escalating tensions in the Middle East, particularly around the Strait of Hormuz are raising concerns that geopolitical risks could soon disrupt the fragile market rebound.
Read also: Shipping Disruptions in Strait of Hormuz Impact Global Steel Trade
According to the latest update from the Drewry World Container Index, the global benchmark for container spot rates increased 3% to $1,958 per 40-foot container in the week ending March 5. The rise marks the first weekly gain after seven consecutive weeks of declining rates.
The improvement comes as manufacturing activity across Asia gradually returns to normal following the holiday break. With factories restarting operations, shipping lines have begun reducing blank sailings and restoring vessel capacity across key trade routes.
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Rates on the transpacific corridor recorded some of the strongest gains. Freight prices from Shanghai to Los Angeles climbed 10% to $2,402 per forty-foot container, while Shanghai to New York increased 7% to $2,977.
In contrast, Asia–Europe routes continued to face softer demand. Rates from Shanghai to Rotterdam slipped 2% to $2,052, while shipments from Shanghai to Genoa rose only slightly, increasing 1% to $2,844. Despite the modest performance, analysts expect cargo volumes on these routes to strengthen through March as production across Asia fully resumes.
Drewry noted that carriers are already preparing to restore capacity on the Asia–Europe and Mediterranean trades. Only four cancelled sailings have been scheduled for the next two weeks, suggesting that services are gradually returning to normal levels.
A similar trend is emerging on the transpacific routes. Drewry’s Container Capacity Insight reported just four blank sailings planned for the upcoming week on both U.S. East Coast and West Coast services, significantly fewer than earlier in the year.
However, the improving demand outlook is now being overshadowed by rising geopolitical risk. Commercial shipping in the Persian Gulf has slowed sharply following coordinated military strikes by the United States and Israel against Iran, raising fears of further disruption around the Strait of Hormuz.
The waterway is one of the world’s most critical energy chokepoints, handling roughly 20% of global oil supply. As tensions rise, energy markets have already reacted, with crude prices climbing on concerns over potential supply interruptions.
Drewry warned that higher fuel costs, increased war-risk insurance premiums, and potential operational disruptions could translate into higher freight rates for container shipping.
Although container vessels have relatively limited direct exposure to Gulf routes compared with oil tankers and LNG carriers, the indirect effects could still be significant. Rising bunker fuel prices, longer diversions, and elevated insurance costs could all push carriers to increase rates.
According to Drewry’s analysis, about 158 container ships, representing approximately 691,000 TEU, or roughly 2.1% of global container capacity, were operating in the Gulf region when the crisis began. This limits immediate operational exposure, but prolonged instability could still reshape global shipping patterns.
One key risk is that renewed security concerns could delay plans by some carriers to return vessels to the Suez Canal after months of diversions caused by the Red Sea crisis. If that happens, effective fleet capacity could remain constrained, potentially supporting higher freight rates.
For now, the container shipping market is balancing two opposing forces: improving seasonal demand from Asia and mounting geopolitical uncertainty. If export volumes continue to recover while energy costs climb, the recent rise in freight rates could mark the beginning of another period of disruption-driven volatility for global shipping.
