The disruption to global shipping caused by the West Asia conflict has triggered a sharp escalation in container freight rates across major trade routes, including corridors that do not directly pass through the Strait of Hormuz, highlighting the far-reaching impact of the crisis on global supply chains.
According to ocean and air freight intelligence platform Xeneta, spot freight rates from the Far East to the US West Coast surged 192 per cent between February 28 and June 19, rising from $1,879 per forty-foot equivalent unit (FEU) to $5,493. Rates from the Far East to the US East Coast climbed 158 per cent to $6,850 from $2,652, while freight rates from the Far East to Europe more than doubled, increasing 106 per cent to $4,572 from $2,200.
The steep rise has accelerated in recent days. Over the past week alone, rates increased by 29 per cent on the Far East–US West Coast route and 25 per cent on the Far East–US East Coast trade lane.
“Spot rates will keep climbing for as long as the Strait of Hormuz is not fully open,” said Peter Sand. “That could be four more weeks or longer depending on how complex the de-mining operation turns out to be. Shippers should plan for a peak around the point the strait formally reopens, followed by a gradual easing.”
Massive Capacity Disruption
Xeneta’s analysis reveals the scale of the disruption. Prior to the conflict, 99 container services operated in or transited the Arabian Gulf, deploying approximately 3.2 million TEUs—equivalent to around 10 per cent of the global container fleet. Following the blockade, only 11 services remain active, representing just 74,000 TEUs of capacity.
Of the 488 vessels previously deployed on these routes, only 18 continue operating in the region, while 470 ships have been redeployed across global shipping networks, creating significant imbalances in vessel availability and cargo flows.
Freight Markets Expected to Stay Elevated
Industry experts caution that freight rates are unlikely to return to pre-crisis levels even after shipping traffic resumes through Hormuz.
“The reopening of Hormuz removes a major risk to global container trade, but freight rates are unlikely to revert to February 2026 levels anytime soon,” said Jagannarayan Padmanabhan. Elevated insurance costs, network rebalancing requirements and continued diversification of cargo routing will continue to keep logistics costs above pre-crisis levels, he noted.
According to J Krishnan, India’s container trade remains heavily dependent on foreign shipping lines.
“For supply chain efficiency to bounce back, Suez transit is vital. The opening of Hormuz, if sustained, is the first step towards normalization of the Suez route,” he said, adding that war-risk insurance premiums would decline only gradually as confidence returns to the market.
Long Road to Recovery
Sand believes that even under an optimistic scenario, global container shipping networks may not fully recover before mid-September.
“Even if the ceasefire holds, around 10 per cent of global container shipping capacity is impacted by the blockade and freight rates are spiralling across major trades. This scale of disruption and market volatility cannot be reversed overnight,” he said.
For India, the significance of the emerging diplomatic breakthrough lies not only in reopening the Strait of Hormuz but also in the lengthy process required to restore normal shipping operations.
Vivek Raja said that while Indian exporters would welcome any development that eases freight pressure, vessel dislocation, equipment shortages and elevated freight rates are likely to persist for several months.
India’s container trade remains closely integrated with the East-West shipping networks that have absorbed the shock of the Hormuz disruption. As a result, Indian exporters and importers are expected to continue facing higher transportation costs, longer transit times and tighter vessel availability until global shipping lines fully restore network balance.
While the reopening of Hormuz would remove a major geopolitical risk, industry stakeholders warn that the commercial consequences of four months of supply chain disruption will continue to reverberate through global and Indian trade well beyond the restoration of vessel traffic.
