Container prices hold steady amid rising fuel costs

Drewry’s World Container Index remained flat this week, despite ongoing tensions in the Middle East. Global container shipping is not being seriously disrupted by the war in the Middle East, but fuel costs are rising. We are currently in the low season, when prices normally decline.Drewry anticipates that spot rates will rise in the coming weeks on both the Transpacific and Asia–Europe routes, as higher bunker fuel costs lead carriers to introduce emergency bunker surcharges.Bloomberg brings some hopeful news: for the first time since the Iran war began on February 28, a Western European container ship has crossed the Strait of Hormuz, according to Bloomberg. The vessel is a French-owned ship operated by CMA CGM.Iran indicated yesterday that it intends to retain control over shipping in the Strait of Hormuz even after the end of the war, together with Oman. Iran had already made plans to start charging tolls on the waterway.Under the leadership of the UK, forty countries (excluding the US), including the Netherlands, held a virtual meeting yesterday on measures to reopen the strait. The countries intend to focus on diplomacy and sanctions rather than military intervention, which Trump is calling for, the BBC reports.The European Commission is asking the member states to prepare for disruptions of oil and gas supplies from the Middle East that could last for a prolonged period. This week, the energy ministers were meeting in an emergency session to discuss the energy crisis. In a leaked letter that EU Energy Commissioner Dan Jørgensen sent to the energy ministers of the member states, the European Commission calls on them to take voluntary measures to curb fuel demand, especially in the transport sector. According to Jørgensen, the European Union must prepare for a potentially prolonged disruption. They are also warned against taking unilateral measures, such as cuts to excise duties.The availability of kerosene in Europe is problematic, according to the Dutch logistics sector association Evofenedex. An estimated 30% to 40% of the kerosene imported into Europe comes from the Gulf region, the industry body said. “The last shipments dispatched before the escalation are expected to arrive in mid-April.” The global Freightos Air Index is currently 22% higher than a year ago, and rates on major trade lanes are still above pre-war levels. At the same time, prices are beginning to stabilize according to a recent Freightos update – and are even easing slightly on some routes – as European and Asian carriers add more direct Asia–Europe flights and Gulf carriers gradually restore their schedules.