Freightos: Canal Restrictions to Bring Surcharges of Up to $1,000 in Mid-September
en.Wedoany.com Reported - Freightos' latest analysis shows that the container shipping market is simultaneously under multiple pressures, including Panama Canal transit restrictions, port congestion in Asia and Europe, and rising shipping costs. The industry had already been affected by Iran's continued attacks in the Persian Gulf and the U.S. maintaining a blockade of the Strait of Hormuz. With the U.S.-Iran memorandum of understanding expiring, the prospect of reopening the Strait of Hormuz remains uncertain.
The Panama Canal is expected to face restrictions due to severe drought linked to El Niño, which may occur between late this year and 2027. The Panama Canal Authority (ACP) has reduced daily transits by two and lowered the maximum draft for Neopanamax vessels to 14.6 meters by the end of August and 14.7 meters by early September. Some shipping lines have announced surcharges ranging from $200 to $1,000 per FEU starting in mid-September, which could affect cargo flows from Asia to the U.S. East Coast (USEC). In 2023, low water levels reduced drafts to 44 feet and daily transits to 22, compared with a normal capacity of nearly 36. The high costs and waiting times at that time prompted some shipping lines to adjust services and avoid the canal.
Port congestion continues to affect major Far East ports, while European ports are also under pressure. Freightos noted that even before recent storms affected Chinese ports and drought events, higher cargo volumes had already caused more severe delays than normal, straining port capacity. Maersk has identified congestion as a new and significant component of container market dynamics.
The agreement signed 60 days ago between the U.S. and Iran, aimed at reopening the Strait of Hormuz and initiating negotiations to end the war, expired this week. However, Iran's attacks continue, and the U.S. blockade remains in effect. Freightos believes the reopening of the strait is no closer than before the agreement was signed. Maersk, Hapag-Lloyd, CMA CGM, and Cosco still plan to proceed with the eventual resumption of Red Sea transits, despite heightened tensions in the region and new attacks.
Freightos' analysis suggests that changing market conditions are the reason shipping lines are more willing to return to that route: although insurance premiums for transiting the Bab el-Mandeb Strait remain high, the closure of the Strait of Hormuz has pushed up fuel costs, making the voyage around the Cape of Good Hope significantly more expensive than during the period from late 2023 to the start of the war.
In terms of freight rates, spot rates on Asia-to-Europe routes have fallen as cargo volumes cool, with the peak season ending early. Rates from Asia to Northern Europe averaged around $5,000 per FEU last week and dropped to approximately $4,700 per FEU this week, down more than $1,000 per FEU, or 20%, from the July peak, but still $1,800 per FEU, or 60%, higher than May levels. Rates from Asia to the Mediterranean fell 4% last week and dropped another $900 per FEU this week to around $5,000 per FEU, a cumulative decline of 30% from the July peak.
Transpacific routes remain strong: rates from Asia to the U.S. West Coast (USWC) rose 9% last week to approximately $7,400 per FEU, while rates from Asia to the U.S. East Coast increased 3% to a new high of $9,400 per FEU.
Additionally, fuel prices have risen 15% since the ceasefire agreement collapsed, and some shipping lines will implement emergency bunker surcharges of approximately $90 per FEU in mid-September. Freightos accordingly warns that although some routes show signs of demand normalization, geopolitical, operational, and climatic factors continue to exert pressure on international transport costs and capacity.
