Strong demand pushes container freight rates higher

Despite the partial reopening of the Strait of Hormuz, container freight rates continue to rise due to strong demand. The peak season has started early, while shippers are front-loading cargo to the US ahead of new tariffs.The Drewry World Container Index increased by a further 5% this week. The Shanghai–Los Angeles route recorded the largest gain, rising by 12%, while Shanghai–New York and New York–Rotterdam both increased by 6%. Spot rates on the Asia–Europe trade lane were unchanged this week.Compared with 26 February, the index has more than doubled (+119.4%). Year on year, it is up 40%. The Shanghai–Los Angeles route has recorded the largest annual increase (+54%), followed by Shanghai–Genoa (+40%).Cheaper bunker fuelWith oil prices now almost back to pre-war levels, bunker and jet fuel prices are also falling. According to Freightos, bunker fuel prices have fallen by 25% from their March peak and by 12% since the beginning of June, although they remain around 40% higher than in February. Jet fuel prices have dropped by more than 40% from their peak but are still 20% above pre-closure levels.Transpacific demand remains strong as importers continue to front-load shipments ahead of potential US tariff changes. Drewry expects freight rates on this trade lane to increase further in the coming weeks.On the Asia–Europe trade lane, shippers are also front-loading cargo ahead of the 1 July bunker fuel adjustment. Drewry expects freight rates on this route to continue rising over the coming weeks. Congestion at major ports and strong demand are keeping capacity tight, allowing carriers to impose surcharges and pushing spot rates higher. Further rate volatility and limited vessel availability are expected in the short term.