• Strait of Hormuz closure is keeping fuel costs elevated, supporting ocean freight rates even during the seasonal demand lull, though pricing remains below peaks seen during the Red Sea crisis.

• Asia–Europe container rates have eased slightly, while transpacific lanes continue to strengthen, driven more by carrier discipline than demand fundamentals.

• Air cargo markets are under fuel pressure and capacity reshuffling, but global supply is stabilising as Middle East carriers recover and routing adjustments take effect.

The closure of the Strait of Hormuz continues to dominate energy and freight market sentiment, but its effects on container shipping have proved less uniform than headline pricing in oil markets might suggest. While fuel costs remain elevated and are filtering through into operating expenses, container markets are showing a mixed response shaped as much by capacity management as by demand fundamentals.

Ocean freight rates are holding above typical post–Lunar New Year lows, a period when pricing normally softens before the summer peak season. Elevated bunker fuel costs linked to the disruption have provided a floor under rates, preventing the usual seasonal slide. However, current pricing still sits well below the sharp spikes triggered by earlier geopolitical shocks such as the Red Sea crisis and trade-driven frontloading earlier in the cycle.

On the Asia–Europe trade lane, rates softened again last week. North Europe pricing slipped to US$2,668 per FEU, roughly 8 percent above pre-conflict levels but still far from recent highs. The Mediterranean route followed a similar pattern, easing to US$3,527 per FEU, slightly below late February levels. Despite these declines, both lanes remain around 15 percent higher than the last comparable low-demand period in October, reflecting the residual cost pressure from fuel and ongoing schedule adjustments. Carriers, including Maersk, have begun withdrawing capacity through blanked sailings and have also cancelled planned general rate increases, signalling limited confidence in sustaining higher price levels on these routes.

Transpacific trades, by contrast, have shown more resilience. West Coast rates rose to US$2,675 per FEU, up roughly 45 percent since the onset of the current disruption, while East Coast pricing has approached US$4,000 per FEU. These gains reflect more successful carrier-led pricing discipline, though underlying conditions remain weak, with abundant capacity and subdued demand preventing full implementation of surcharges and announced increases.

In the Gulf region, container flows continue to be rerouted through alternative corridors, but network stress is evident. Operators report congestion and uneven equipment availability, particularly for export cargo. Even so, capacity deployments are being adjusted, with additional services directed into key hubs such as Jeddah, reflecting efforts to stabilise supply chains under rerouted conditions.

Airfreight markets are also absorbing the effects of higher fuel costs, though the dynamics are slightly different. Jet fuel inflation has prompted selective network reductions across Europe, including short-haul flight cuts from Lufthansa and KLM, alongside new cargo-specific surcharges from carriers such as United Airlines. In Southeast Asia, tightening fuel availability is already forcing operational adjustments, including additional refuelling stops on long-haul routes.

Despite these pressures, global air cargo capacity has largely recovered from earlier declines and now sits only marginally below pre-conflict levels. The rebound of Middle East carriers and strategic redeployment by global airlines have helped stabilise supply, particularly on Asia–Europe lanes where demand has shifted. As a result, airfreight rates have plateaued after earlier volatility. The Freightos Air Index shows China–North America at US$6.40 per kg, China–Europe at US$5.07 per kg, and South Asia–Europe at US$4.94 per kg, all broadly stable or slightly softer week-on-week.

SEA–Europe rates remain the exception, rising modestly but still below recent highs. Overall, airfreight pricing is holding roughly 30 percent above pre-conflict levels, though momentum has clearly flattened as capacity returns and fuel pricing stabilises.

Looking ahead, market attention is likely to shift towards peak season expectations. Whether carriers can sustain current rate levels into mid-year will depend less on disruption and more on demand recovery, inventory cycles and the extent to which higher end-consumer costs dampen volumes across major tradelanes.

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