Trans-Pacific Freight Rates Remain Elevated Amid Muted Demand

Freight rates on major trade lanes from Asia to the US are still substantially higher than before the Iran tensions escalated in late February. However, rather than being demand-driven, the current price levels are largely being "propped up" by ocean carriers' capacity reduction strategies.

Capacity Management Continues to Prop Up Rates

The latest data from the Freightos Baltic Index shows that average weekly rates on the trans-Pacific are currently about $1,000/FEU (forty-foot equivalent unit) higher than in the pre-conflict period.

For the week ending May 8, Asia-US West Coast (USWC) rates rose by 4% to $2,828/FEU. Meanwhile, the Asia-US East Coast (USEC) lane saw a slight increase of 1%, reaching $4,340/FEU.

In contrast to the trend on the trans-Pacific, the Asia-Europe market is showing signs of cooling down. Judah Levine, Head of Research at Freightos (NASDAQ: CRGO), noted in his latest research report: "Asia-Europe rates, which had gained a few hundred dollars per FEU in March, have now largely reverted to pre-conflict levels."

Spot rates on the Asia-North Europe route increased by 10% last week to $2,850/FEU. However, a downward trend has begun to emerge this week, mirroring the developments seen on the Mediterranean trade lane earlier this month.

To counter weakening demand, shipping lines are stepping up their supply-tightening strategies through blank sailings and capacity adjustments. According to Levine: "Carriers are planning further rate increases, albeit likely modest ones, for mid-month."

Concurrently, the number of canceled sailings continues to rise amid multiple reports of space shortages emerging on several East-West trade lanes. Furthermore, many confirmed container bookings are being rolled to subsequent voyages due to capacity constraints.

This is seen as a clear effort by carriers to protect spot rate levels during the slack season, while also preparing for the anticipated rebound in shipping demand during the year-end peak season.

Hormuz Risks Continue to Exert Pressure

Carriers' price-supporting measures are taking place against a backdrop of geopolitical risks in the Middle East that have yet to cool down.

According to Levine, Washington and Tehran have resumed military posturing around the Strait of Hormuz after the US paused its commercial vessel escort operation less than two days after its initial deployment.

On Iran's side, the country announced the establishment of the Persian Gulf Strait Authority (PGSA) to coordinate traffic through this strategic maritime route. Meanwhile, observers are still monitoring whether dialogues in Beijing between US President Donald Trump and Chinese President Xi Jinping could yield any significant impact on the regional landscape.

Cost pressures from the Hormuz flashpoint remain massive. In its Q1 earnings report, Maersk stated that disruptions in the region are incurring approximately $500 million in additional costs per month—an expense that has already been partially passed down into freight rates.

Some industry experts also warn that in the near future, the pressing concern will not just be fuel prices, but the actual accessibility of bunker fuel supplies to operate the fleets.

Recovery Outlook Still Lacks Momentum

On the demand side, the US consumer market has yet to emit many positive signals.

Citing the National Retail Federation's (NRF) projection of a rather muted peak season on the trans-Pacific, Levine stated: "June volumes are projected to be 2% lower than May, while July is expected to increase by only about 4% before weakening again."

According to him, this reflects the cautious sentiment of importers amid stubbornly high fuel costs and an unclear consumer outlook for the second half of the year.

Overall, the short-term container shipping market is likely to remain in a tug-of-war between aggressive capacity management measures by carriers on one side and hesitant import demand on the other. In this context, the risks of fuel cost volatility and geopolitical tensions will continue to be factors capable of heavily impacting global freight rates.

See more:

• CMA CGM Implements Peak Season Surcharge from South China and Hong Kong
• Maersk: Iran War is Adding $500 Million in Costs per Month - And Customers Will Have to Shoulder a Portion
• International Shipping and Logistics Market Update Week 19/2026 | Phaata
• Hormuz Traffic in Freefall: Iran Tightens Its Grip as the World Waits to See What 'Reopening' Really Means
• Yang Ming Expands Far East - Latin America Service Network Through Agreements with HMM and ONE
• Maersk Q1 2026: Solid Growth Despite Freight Rate Pressures and Geopolitical Instability
• Shipping Lines Adrift in Uncertainty: When Will the Strait of Hormuz Truly Reopen?
• Global Schedule Reliability Hits Year-to-Date High in March 2026
• Two US Destroyers Enter the Persian Gulf, Washington Declares Absolute Control Over the Strait of Hormuz
• Middle East Pressure: Maersk Shifts to Weekly Fuel Surcharge Mechanism in Three European Countries
• Trans-Pacific Trade: The Exodus of Non-Alliance Carriers
• The North European Port Paradox: When Opting for 'Mega-Ports' No Longer Guarantees Schedule Reliability
• International Shipping and Logistics Market Update Week 18/2026 | Phaata
• COSCO schedules: Vietnam - North America in May 2026
• COSCO updates Vietnam-Intra Asia sailing schedules in May 2026
• COSCO updates Vietnam-North Europe sailing schedules in May 2026
• COSCO updates sailing schedules of Vietnam - South America & Africa in May 2026
• COSCO updates sailing schedules of Vietnam-Middle East & Oceania in May 2026
• SITC updates Vietnam-Intra Asia sailing schedules in May 2026

Source: Phaata.com (According to Freight Waves)

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