Container freight rates remain on the rise despite easing Iran tensions

A large number of vessels have remained in the Middle East since the outbreak of the Iran conflict. However, following the memorandum of understanding between the US and Iran, some are now beginning to leave the region. Bunker fuel prices may decline, but strong peak-season demand is continuing to put upward pressure on container rates.The Drewry World Container Index rose by 12%, supported by stronger rates on the Transpacific and Asia–Europe trade lanes. On the Transpacific route, shipping lines are implementing surcharges to capitalise on increasing demand, which is being driven by cargo front-loading ahead of expected changes to US tariffs in July, according to Drewry. The consultancy expects freight rates to continue rising over the coming weeks.According to Drewry, freight rates from Shanghai to Rotterdam increased by 15%, while rates from Shanghai to Genoa rose by 12%. The consultancy attributed the increases to strong peak-season demand, driven by the front-loading of cargo ahead of the expected 1 July bunker fuel adjustment, which enabled carriers to successfully introduce surcharges. The consultancy expects rates on this trade lane to continue rising in the coming weeks.Drewry notes that, despite the recent agreement between the US and Iran, uncertainty persists over the implications for global shipping, particularly traffic through the Strait of Hormuz. While the easing of geopolitical tensions is likely to help stabilise oil and bunker fuel prices, thereby easing cost pressures for ocean carriers, spot rates continue to be supported by robust peak-season demand and the ongoing introduction of carrier surcharges.According to Lloyd’s List, at least 14 vessels transited the Strait of Hormuz on 18 June, compared with just two transits recorded on the same day a week earlier. An estimated 550 vessels are still waiting to leave the region. According to analysts, a full reopening of the Strait of Hormuz would not immediately restore normal traffic flows, as Iranian naval mines are still expected to pose a significant obstacle to safe navigation.