According to chief analyst Peter Sand, container rates on the China–Europe route have now increased by around nine per cent compared with the period before the attacks on Iran began. The increase is an early sign that regional tensions can quickly spread across international supply chains.
For now, the largest increases in container rates are visible on routes closer to the conflict zone. Spot rates for containers from China to the port of Salalah in Oman have already risen by 28 per cent. Transport to Colombo in Sri Lanka is also becoming more expensive, with an increase of around 17 per cent.
These ports are increasingly acting as alternative transhipment hubs as ports in the Persian Gulf have become more difficult to reach. Salalah is currently seen as an important diversion point for container flows that would normally pass through the Gulf region. At the same time, pressure on Colombo is increasing as shipping companies try to avoid further risks around the conflict zone.
The rise in container rates is not limited to the region around the conflict. According to Xeneta, ripple effects are already appearing on major global trade routes. Delays, rerouting and additional transhipment are leading to longer transit times and higher operational costs for shipping companies.
The impact is also becoming visible in European short sea shipping. Norwegian shipping company Viasea Shipping has announced that it will introduce a so-called Cost Recovery Charge from 12 March due to rising operational costs. This surcharge amounts to $60 per teu, and on routes between Norway, the Baltic region and the Iberian Peninsula as much as $120 per teu.
Around 20 per cent of the global oil supply normally passes through the Strait of Hormuz. Disruption on this route has a direct impact on fuel prices and transport costs.
The Drewry World Container Index, an important indicator of global container rates, recently recorded an average increase of three per cent per 40-foot container. On the Asia–Europe route, rates were still slightly lower, but analysts expect them to rise in the coming weeks.
Besides geopolitical tensions, seasonal demand also plays a role. After the Chinese New Year, factories in Asia resume full production, increasing export volumes and demand for container capacity. Combined with higher fuel costs and insurance premiums, this could push container rates even higher.
Insurers are still offering cover for ships sailing through the Strait of Hormuz, although premiums have increased significantly. According to the Lloyd’s Market Association, around 40 additional ships have passed through the strait since the weekend. Nevertheless, many vessels remain in the Persian Gulf for now due to the high security risks.
These developments show how quickly a regional crisis can spill over into international trade. Rising fuel prices, higher insurance premiums and longer shipping routes could push container rates even higher worldwide if tensions in the Middle East continue.
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