The Shanghai Containerized Freight Index (SCFI) has risen for eight consecutive weeks, reaching 3,121.69 points on June 18, breaking through the 3,000‑point mark.
The current container shipping market has accumulated gains of over 60%, with broad‑based increases across major routes including Europe, the Mediterranean, South America, and Australia/New Zealand. Key Asia‑Europe routes posted weekly gains of 10%–15%. Market sentiment is a mix of optimism and anxiety, and the scene of "no available slots" has returned.
Four core drivers push up freight rates
The Middle East situation is the most direct trigger for this round of rate increases. The Strait of Hormuz, a vital artery for global energy transport, has seen a sharp drop in transit efficiency. As of June 15, the total value of ships and cargo affected by the strait's disruption reached approximately $125 billion, with total tonnage of about 29 million gross tons. A large number of vessels have been forced to reroute via alternative routes, extending voyage times by 10 to 14 days directly.
During the U.S.‑Iran negotiations, the number of ships passing through the Strait of Hormuz plummeted from 26 the previous day to just 5, with another 22 vessels stranded in the strait area. Although the number of transits rose to 93 from June 19 to 21 – triple the previous level – it remains significantly below the pre‑crisis daily average of 125 vessels.
Geopolitical tensions have pushed up oil prices, and fuel costs have surged accordingly. Bunker fuel prices at major global bunkering ports have jumped nearly 70%. Maersk CEO Vincent Clerc revealed that since the Middle East conflict broke out, Maersk's monthly fuel costs have doubled to about $500 million, and these additional costs have been fully passed on to customers through surcharges and fuel adjustment mechanisms.
Capacity contraction is also continuing to build. Some vessels have suspended operations on Middle East routes, and combined with slow‑steaming and reduced port turnaround efficiency, effective market capacity is constantly shrinking. Carriers are actively managing capacity through void sailings and blank sailings, with multiple trans‑Pacific sailings still cancelled.
At the same time, peak‑season demand has arrived early. Summer consumption in Europe and the Americas, along with manufacturing inventory restocking, has been brought forward, and export orders have concentratedly surged. The approaching World Cup and North American holiday shopping seasons, as well as promotional stocking by e‑commerce platforms like Amazon and TikTok, have shifted the traditional peak shipping season – normally concentrated from July to September – clearly forward to June. The U.S. imposition of new tariff measures effective July 24 has further reinforced exporters' "rush to ship" sentiment.
Global shipping market changes
The U.S. routes have seen the sharpest gains in this round. On June 18, the spot rate from Shanghai to the U.S. West Coast base port stood at $5,683 per FEU, up 11.4% week‑on‑week; to the U.S. East Coast base port it was $6,873 per FEU, up 8.7%. In late April, the Ningbo‑to‑West Coast rate was only about $2,900, and to the East Coast about $3,900.
Currently, the U.S. routes are heavily overbooked, with tight space across East and South China, and frequent rollovers. About 70% of a vessel's capacity is locked in by large shippers via long‑term contracts, leaving far less spot market capacity available, and this supply‑demand imbalance has further pushed up spot rates.
European routes are more directly affected by geopolitical shocks, with Asia‑North Europe rates rising about 81% between weeks 1 and 24. The Mediterranean route is also under pressure; MSC has sharply raised its container quotes for the Mediterranean and Black Sea, with some exceeding $5,700 per FEU.
The tanker market has seen astonishing gains. VLCC rates on the Middle East‑China route peaked above $500,000 per day, a year‑on‑year increase of 569%, and nearly doubling week‑on‑week. A VLCC transporting crude oil through the Strait of Hormuz in the Gulf now costs an average of nearly $470,000 per day.
Impact on bulk commodities such as chemicals
The sharp rise in shipping costs is rapidly passing down the industrial chain, hitting bulk commodities including chemicals, energy, agricultural products, and fertilizers first.
The disruption at the Strait of Hormuz has directly impacted the stability of the global chemical industry chain. Soaring insurance premiums, vessel passage obstacles, and extended transport times in the second quarter have directly pushed up risk premiums for global energy and chemical products, and China's polypropylene industry chain has been trapped in a passive situation of "rising raw material costs, production losses, and weakening demand."
Domestic chemical companies including Wanhua Chemical, Meirui New Materials, Huafon Group, and LB Group have already raised prices. The global tire industry has also seen a new wave of price hikes; according to incomplete statistics, more than 80 tire manufacturers worldwide have followed suit.
Fertilizer exports have also been significantly affected. Although the Middle East accounts for only about 3% of global bulk trade, the closure of the Strait of Hormuz has had a major impact on fertilizer exports, which represent more than 30% of global seaborne supply.
Market outlook
Many industry insiders believe there are no signs of a rate reversal for now. July will be a key observation point: if peak‑season demand eases or strait transit conditions improve by then, the upward trend may gradually stabilise. Otherwise, high freight rates are likely to persist at least until the end of the third quarter.
New vessel deliveries in 2026 will enter a temporary trough, so capacity supply will not put much pressure on current rates. However, this situation is not permanent; orders placed in 2024 and 2025 will be delivered in concentration in 2027, when supply will become significantly looser and rates will most likely decline gradually.
At the same time, global supply chains are no longer solely focused on efficiency, but are placing greater emphasis on security. The shipping industry must adapt to an era of high volatility, and the old model of relying purely on low costs is no longer sustainable.
