Iran's announcement that the Strait of Hormuz was open on Friday, followed shortly by statements that it was closed, led to route changes and temporary disruption. Subsequent attacks on vessels and U.S. forces taking control of an Iranian cargo ship mean there is no change in the overall situation. The ceasefire expiration is approaching, and U.S.-Iran negotiations remain uncertain.
Container logistics to and from the Gulf via alternative ocean-landbridge routes remain constrained. Maersk has suspended landside bookings for some cross-border services to the UAE and out of Salalah. Some ports, such as Khor Fakkan, are congested, while others, including Fujairah and Sohar, are operating more smoothly. Some carriers have increased surcharges for Middle East feeder services out of India.
The broader container market remains operationally stable, but fuel costs continue to drive conditions. Carriers could face bunker shortages within two to three months if the strait does not reopen. Supply remains tight, especially for low-sulfur fuel in hubs such as Singapore, although availability in the Far East is still sufficient.
Bunker fuel prices are 55 per cent higher than before the war, but have declined 15 per cent from their peak a month ago and eased 9 per cent since the start of the month. Lower fuel prices, combined with seasonally lower demand and high capacity levels, are limiting the impact on container rates. Prices are higher year on year across most trades, although carriers have generally not achieved full surcharge or GRI levels.
Transpacific rates increased last week and are about US$800 per FEU higher than before the war, though still below pre-Lunar New Year levels. Asia to Northern Europe rates are around US$2,700 per FEU, 9 per cent higher than at the end of February. Asia to Mediterranean rates are now 5 per cent lower than before the war, and both lanes are down more than 11 per cent so far in April.
Jet fuel prices remain double pre-war levels but have declined 12 per cent since the start of the month. High fuel costs have led most major airlines to cancel some flights, with concerns over fuel availability in parts of Asia and limited stock levels in Europe.
Air freight capacity out of the Middle East is recovering, with Iraq and Bahrain reopening their airspace. Emirates SkyCargo is at 80 per cent capacity, while overall recovery out of Dubai is estimated at 40 per cent. South Asia to Europe rates are just below US$5.00 per kg, while Southeast Asia to Europe stands at US$4.80 per kg. China to Europe rates are at US$5.12 per kg, and China to North America at US$6.41 per kg, both showing slight weekly increases.
Source: Container News
