Congestion playing a bigger role in container rates – August 18, 2026 Update

Weekly highlights

Ocean rates – Freightos Baltic Index

Asia-US West Coast prices (FBX01 Weekly) increased 9%.   

Asia-US East Coast prices (FBX03 Weekly) increased 3%.

Asia-N. Europe prices (FBX11 Weekly) decreased 1%.

Asia-Mediterranean prices (FBX13 Weekly) decreased 4%..

Air rates – Freightos Air Index

China – N. America weekly prices increased 17%.

China – N. Europe weekly prices increased 8%.

N. Europe – N. America weekly prices increased 1%.

Analysis

The US-Iran Memorandum of Understanding – signed sixty days ago and aimed at reopening the Strait of Hormuz and kickstarting negotiations to end the war – expired yesterday. As Iranian attacks continue and the US blockade remains in place, a reopening is seemingly no closer than before the agreement.

Despite the ongoing war and increased tensions and renewed attacks in the Red Sea, Maersk – along with Hapag-Lloyd, CMA CGM and COSCO – is determined to continue taking steps back toward resuming Red Sea transits. While earlier threats and attacks in the waterway had led to carrier u-turns, changed container market conditions may be behind this new carrier resolve to return even as security concerns remain. 

Linerlytica recently pointed out that even with significant insurance premiums to cross the Bab el Mandeb, higher fuel costs from the Hormuz closure are making diversions around the Cape of Good Hope much more expensive than they’d been from late 2023 when diversions began until the start of the war.

Another new motivating factor may be port congestion that just won’t seem to go away. The current spike in congestion can be attributed to external shocks like recent storms and drought. But even before these developments, major ports in the Far East and especially Europe have been plagued with higher than normal delays due to steady increases in volumes that are pushing past port capacity levels. 

Maersk recently singled out congestion as a new and major component of container market dynamics, with growing headhaul demand leading to a heavier headhaul/backhaul imbalance, and a growing number of empty containers for ports to process. In terms of the Red Sea, vessel capacity chronically tied up for long stretches at congested ports may be incentivizing carriers to consider the shorter Red Sea route and add some speed to a slowed-down ecosystem. 

Port congestion, which now includes delays from a labor strike in Germany, could be one factor keeping Asia – Europe container rates higher than they otherwise would be as peak season demand eases. Cooling volumes have brought down freight rates from their mid-July highs on Asia – Europe lanes, as this year’s early peak season started to unwind early too. 

Asia – N. Europe prices averaged about $5,000/FEU last week but have decreased to $4,700/FEU so far this week, down 20% and more than $1,000/FEU since the July high, but still 60% and $1,800/FEU higher than back in May before peak season began. Asia – Mediterranean rates dipped 4% last week but fell another $900/FEU so far this week to about $5,000/FEU for a $2,000/FEU and 30% slide from their July peak. 

Peak season demand on the transpacific, meanwhile continues to hold up. Rates to the West Coast climbed 9% last week to about $7,400/FEU, nearly back to its earlier high following some decrease in the second half of July.  East Coast prices increased 3% last week to a new high of $9,400/FEU. 

Container spot rates could face some upward pressure from other sources in the coming weeks too. Bunker prices have climbed 15% since the ceasefire collapse, and some carriers will increase emergency fuel surcharges by about $90/FEU in mid-September. 

The Panama Canal Authority is taking preemptive steps to conserve water in anticipation of serious El Nino-caused drought later this year and into 2027. The ACP has reduced daily transits by two, and will lower the maximum draft for Neopanamax vessels by a foot and a half to 48 feet later this month, and 47.5 feet in early September. Some carriers announced canal transit surcharges ranging from $200 – $1,000/FEU starting in mid-September, which could impact freight rates for some Asia – US East Coast volumes. 

For frame of reference, the Panama Canal last faced significant low water levels for about a year starting in May 2023. At its lowest, draft restrictions were set at 44 feet and daily transits were reduced to 22 from a norm of about 36.  Higher costs and longer waits meant that some carriers adjusted relevant services to avoid the canal, relying instead on transhipment from one coast of Panama to the other. Some of the West Coast volume increases during that stretch may have also been driven by those restrictions. 

Air cargo rates out of China increased last week, possibly driven by disruptions to air operations from the recent typhoon. Freightos Air Index data show China – N. America prices up 17% to more than $7.00/kg last week, though rates have eased to about $6.50/kg so far this week. China – Europe rates climbed 8% to $4.45/kg last week and have decreased slightly since then. China – Europe operations have faced slumping volumes as the EU de minimis cancellation has reduced e-commerce demand on this lane, though carrier capacity shifts have prevented a sharp rate drop.

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