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Cargo surge and port congestion send Far East-Middle East rates climbing

Freight rates from Asia to Gulf economies trapped behind the straits of Hormuz hit unprecedented highs during this year's peak season as importers rushed to get cargo into the region, prompting another wave of port congestion. According to new data from Container Trades Statistics (CTS), prices on its Far East-Middle East & Indian subcontinent corridor showed the highest growth in freight rates of any major lane in container shipping so far this year. "It'll be no surprise that the big price index increase is Asia to India and the Middle East, where the index is up 250% since the beginning of the year and 25% month-on-month - so September's seen a resurgence of the price there and we're seeing some very strong prices," CTS chief executive Nigel Pusey tells The Loadstar's podcast today. The last pricing data came after volumes on the route rebounded during September for the first time since the onset of conflict in the region. "From Greater China to the Middle East, September was a bit of a boom month of volumes - China to Middle East was actually above this time last year for the first time since January and February. "I suspect that will fall back, but what has just kept forcing its way through to the top is the price they're paying to achieve it. We are now at a price index from Greater China to Middle East of 392, which is up 250% on the beginning of the year. "We have a month-on-month increase of 15.5%, despite the fact that year-to-date volumes are down 12%. "So, at the moment, what we've seen is a surge of cargo in late August, early September with prices to match, although I think that will drop off in October because the attacks did come back in that early part of the month. According to the latest spot rate data as per the Shanghai Containerised Freight index (SCFI), freight rates appear to have hit a ceiling of $6,500 per 40ft on the SCFI's Shanghai-Dubai leg and held at that level throughout October. However, that is some 300% up on the $1,630 per 40ft recorded at the end of October 2025. Meanwhile, the September surge has created some port congestion in the region, particularly at the two main ports immediately outside Hormuz - Fujairah and Khor Fakkan - which have acted as the chief landbridge gateways for GCC importers. Linerlytica reported last week that MSC had included a call at Khor Fakkan on a new Far East-Middle East service deploying 24,000 teu ships, "despite severe berthing delays". "Port congestion at Middle East ports has surged to a record high," Linerlytica added, and Mr Pusey said he expected to see liner networks flex to cope with the congestion. "I think there'll be some deviations. I've noticed one or two lines have stopped even serving cargo into Khor Fakkan and the Fujairah, which suggests that the place is getting very congested because people are trying to rush cargo through," he told The Loadstar. "They're now saying, 'Well, we're going to stop bookings whilst we just take a bit of a breather', and I don't usually use my crystal ball too much, but I'm pretty sure that's what's going to happen in October and early November." In general, the use of Khor Fakkan over Fujairah has divided the liner industry into two broad camps - with MSC and the Gemini partners Maersk and Hapag-Lloyd opting for the former, while CMA CGM and its Ocean Alliance partners have their services concentrated in Fujairah, with both ports hosting increasing numbers of smaller Asian and Middle East regional carriers' services. Meanwhile, Maersk said shippers were returning to using the Saudi Red Sea port of Jeddah as an alternative gateway to Gulf destinations. "Use of the Saudi Landbridge increased during October as evolving conditions at Khor Fakkan and disruption linked to the Strait of Hormuz led customers to explore alternative routings into Saudi Arabia and the wider Gulf," a Maersk statement said. "Interest is expected to continue into November, particularly when customers are seeking to reduce exposure to disruptions affecting port and shipping connections" it added. "The trend also highlights the value of coordinating ocean and landside planning across customer's chosen service providers. "However, capacity, border processing and onward delivery requirements should be confirmed for each shipment before routing decisions are finalized."

Blanked sailings on the rise, with container spot rates on a gentle decline

Container spot freight rates on the transpacific and Asia-Europe trades saw another week of gentle declines amid reduced demand post-peak season, while Asia-Europe carriers and their customers begin annual contract negotiations in earnest. This week's World Container Index (WCI) from Drewry saw spot rates on its Shanghai-Rotterdam leg decline 3% week on week, to $3,504 per 40ft, while pricing on the Shanghai-Genoa route remained flat for the third week in a row, at $4,168 per 40ft. A new round of FAK (freight all kinds) levels are set to be applied next week, although they are modest in ambition and generally range from $4,500-$5,000 per 40ft on Asia-North Europe shipments, and between $5,500-$6,600 per 40ft on Asia-Mediterranean. They are largely around the level carriers have been targeting for the past couple of months. However, they are also being accompanied by increased number of blanked sailings - according to Drewry's Container Capacity Insight, eight are scheduled for next week, compared with the five this week. The key aspect to this is that carriers and their customers are positioning for next year, with carriers keen to get spot rates up as much as they can to act as a guide for contract rates, and shippers are, understandably, eager for them to be suppressed after enduring a wild ride during much of 2026. "Those conversations are starting more or less as we speak," Hapag-Lloyd chief executive Rolf Habben Jansen told analysts at the line's third-quarters earnings call this week. "As is usual at this time of year, not everybody sees the market the same - I think when one looks at contracts that will be closed for 2027, they will be at a higher level than what we have seen in 2026. "Also, when you take out the bunker component, that alone will push rates up, of course. But I think we will also see a fairly significant net increase of freight rates going into 2027," he added. Much will therefore depend on the stickiness of pre-Chinese New Year peak season surcharges (PSSs) that are on their way for the beginning of December. Maersk has announced a $1,000 per 40ft PSS on Asia-North Europe shipments from 1 December, while CMA CGM is going earlier, with a $1,600 per 40ft PSS for Asia-Mediterranean shipments due on 25 November. While some Loadstar sources expressed surprise at the early timing, given that the Chinese New Year (CNY) holiday begins on 6 February, Vespucci Maritime founder Lars Jensen noted it was probably appropriate, given that peak pre-CNY demand will occupy most of January. On the transpacific trades, rates have finally began to properly descend after remaining elevated throughout October. The WCI's Shanghai-Los Angeles route was down 2% on the previous week, to end at $7,416 per 40ft, while its Shanghai-New York leg declined 3%, to $9,020 per 40ft container, its lowest since August. However, forwarders on the trade said widespread discounts had been available this week, and virtually no cargo had been booked at published rate levels. "Instead, actual moving rates are dictated by carrier promotional discounts and volume-based pricing, as space across Asian origin ports continues to open up," said US west coast forwarder Freight Right. Carriers have responded to the slowdown in demand with more blanked sailings - eight transpacific voyages will be blanked next week, compared with four this week, according to Drewry - and Freight Right said shippers should be aware that the cheapest spot rates could come with poor reliability for the remainder of the year. "Ocean freight activity is expected to slow further through late November and December, supporting a broadly-stable-to-gradually-softer rate outlook. "Improved space availability should give importers more booking flexibility, although the lowest price may come with greater schedule uncertainty," it said.

Air cargo puts tech to work on missed flights, delays, and wasted capacity

LATAM Cargo is making its largest investment outside freighter aircraft, as airlines and airports turn to technology to tackle missed shipments, recover disrupted flights, and make better use of capacity. The carrier's transformation programme, alongside operational tools at Atlas Air and automation projects at Singapore Changi Airport, shows where digital investment is being directed: toward the decisions and processes that determine whether freight moves as promised. Speaking to The Loadstar at TIACA's Air Cargo Forum in Miami last month, LATAM Cargo CEO Andrés Bianchi said the programme involved around 18 teams and had already delivered 45 digital products, with five more planned for Q4. "This is the largest investment LATAM Cargo has ever made in something other than a freighter," he said, declining to disclose the amount. The starting point was changing how the company worked, he explained, moving away from traditional departmental silos and identifying where performance needed to improve. "It's thinking in a different way in terms of how people work, and then asking them what they need to deliver using technology," said Mr Bianchi. LATAM first considers whether existing software can meet its requirements, but he estimated that 80% to 90% of what it needed was worth developing in-house. For customers, the priorities were reliability, speed and peace of mind. That meant addressing failures such as cargo missing a flight because of a document or communication problem, rather than simply replicating the information services airlines had traditionally offered. Tracking was another example: customers might want shipment information delivered through a different channel, rather than having to retrieve it from a website. Better aircraft loading and planning also offered a way to release capacity. Mr Bianchi cited finding an additional 5% payload as an example of the potential benefit on constrained lanes, rather than a quantified result already achieved. At Atlas Air, chief strategy and transformation officer Martin Drew described a Network Decision Support Tool designed to help untangle disrupted aircraft and crew schedules. A weather delay, for example, could leave a crew unable to operate its next flight within their permitted hours. Replacing that crew creates further questions about positioning, cost, and whether an aircraft will still reach its maintenance location with enough time and staff available. Atlas's operation is particularly complex, because it does not follow a conventional hub-and-spoke pattern, he explained. The tool produces recommendations within milliseconds, assessing the cost and operational consequences of recovery options, Mr Drew said. "It's such a complex sort of jigsaw," he added. Previously, the exercise had been largely manual and could result in less-effective decisions. Atlas developed the tools through a transformation team combining internal operational expertise with people recruited from consultants and other airlines. It has also brought data together through a Databricks platform to support decision-making. Future development includes maintenance planning, aircraft routing, and integrated scheduling of aircraft and crews. Mr Drew also identified opportunities to improve forecasting by examining larger volumes of data. At Changi Airport, one measurable result comes from coordinating trucks with cargo readiness and warehouse resources. VP of its cargo business division Jaisey Yip said early results from truck-dock slot booking showed waiting times for cargo lodgement had fallen by about 25%. Introduced in 2024 for cargo lodgement - submitting documentation electronically to authorities or handlers before the physical cargo arrives - and extended to collection the following year, the system replaces uncoordinated arrivals with planned visits, aligned with shipment readiness and handlers' available dock capacity. The airport is working with SATS, dnata, and tech partners. An enhanced version, planned for 2027, would deepen integration with handlers' cargo management systems and allow multiple slots to be consolidated into one trip. Changi is also trialling Aircraft 360, using computer vision and AI to monitor milestones during aircraft turnarounds. When a process falls behind, the system alerts operational partners so they can redeploy resources before delays spread. Ms Yip reported early improvements in turnaround punctuality, but did not quantify them. Autonomous cargo transport remains another area of testing. SATS is trialling vehicles to move shipments between its import terminal and forwarders' warehouses within the airport free trade zone. Driverless baggage tractors are already operating, but extending the technology to cargo towing involves further work. For LATAM, technology investment also depends on maintaining the people who understand customers' problems, and can act on the information. "AI will help you make better decisions," Mr Bianchi said. "The people at the front are going to make those decisions."