Freightos Baltic: Rates establish elevated floor as overcapacity and easing bunker costs blunt war surcharges

Read more on Freightos

Container freight rates are establishing a structurally elevated floor heading into the post-Lunar New Year demand trough. While escalating fuel costs stemming from the Strait of Hormuz closure are preventing typical seasonal price degradation, current pricing remains well below historical shock events such as the Red Sea crisis or pandemic-era frontloading.

Asia-Europe pricing continues to soften, shedding 3% last week across both Northern Europe and Mediterranean corridors. Initial war-driven rallies have largely evaporated; Northern Europe sits at $2,668/FEU, just 8% above pre-war levels, while Mediterranean rates at $3,527/FEU have slipped 3% below late-February baselines.

In response to weak pricing traction, Maersk cancelled a planned General Rate Increase (GRI) and carriers are accelerating blanked sailings to enforce supply discipline. However, underlying support remains firm, with both lanes tracking over 15% higher year-on-year and more than 50% above October lows.

Conversely, transpacific corridors exhibit sustained upward momentum. US West Coast rates ticked up to $2,675/FEU, representing a 45% premium over pre-war levels and nearly 90% above October’s post-peak trough. East Coast rates are holding near $3,940/FEU, 30% higher than both pre-war and October baselines. Despite these gains, persistent structural overcapacity, lacklustre baseline demand, and a moderate recent easing of bunker fuel prices have prevented carriers from realising full announced GRI or surcharge levels.

Market focus is now shifting to the June-July peak season, though analysts warn that conflict-induced consumer inflation could severely depress forward shipping volumes. Regionally, alternative Gulf routing networks are exhibiting severe operational strain despite reduced throughput. Maersk reports acute friction specifically for Gulf export containers, prompting the Gemini alliance to scale up capacity into Saudi Arabia’s Jeddah port to mitigate persistent delays across the peninsula.

Written by: Farid Muzaffar