OPERATIONAL STATUS OF MAJOR SHIPPING CORRIDORS

Red Sea, Suez Canal, Bab el-Mandeb:
Current Situation:

• Most major carriers are still avoiding the Red Sea and Suez Canal for standard Asia–Europe services.
• Routing via the Cape of Good Hope remains the default for the majority of container volumes.
• Security conditions remain unstable, and earlier limited returns have been reversed by renewed escalation in the region

Current Reality

• No broad return to normal Suez routing
• Only selective or high priority transits, not mainstream schedules
• Risk perception remains the primary driver, not canal availability

Strait of Hormuz

• Commercial shipping remains heavily constrained.
• Carriers continue to avoid or limit Gulf transits due to security and insurance exposure.
• Some vessels are idling or rerouting outside the Gulf entirely.

Cape of Good Hope

• Still the standard global reroute for Europe–Asia trade.
• Adds roughly 10–15 days per voyage and significant fuel cost uplift.
• Now structurally embedded into carrier network planning rather than a temporary workaround.

Overall corridor summary

• No meaningful normalization in global chokepoints
• Routing patterns are stable but longer and more expensive

FREIGHT RATE VOLATILITY & CONTRACTUAL ADJUSTMENTS

Carrier behaviour (Maersk, MSC, CMA CGM, Hapag-Lloyd)

• Contract structures remain heavily adjusted with:
• War-risk surcharges
• Emergency conflict surcharges
• Port-specific restrictions and booking limitations

Market Conditions 

• Rates remain elevated compared to pre-crisis baselines.
• Volatility is still present, but less “spiky” than initial shock phases.
• Contract negotiations continue to favour carriers due to capacity tightening.

Key shift

• The market is no longer purely spot-driven disruption
• It has moved into a “managed elevated pricing” environment

ESCALATION OF OPERATIONAL EXPENDITURES

War-risk insurance

• Premiums remain significantly elevated across Middle East-linked routes.
• Some coverage has been restricted or withdrawn in parts of the Gulf environment.

Fuel and bunker costs

• Bunker Adjustment Factors (BAF) remain sensitive to oil price fluctuations.
• Longer voyages via southern Africa continue to structurally increase fuel burn per container.

Surcharges

• Still widely applied:
• War risk surcharge per TEU (often substantial and carrier-specific)
• Emergency port congestion fees
• Route deviation charges
• These are now a standard pricing layer rather than exceptional add-ons

SUPPLY CHAIN EFFICIENCY & EQUIPMENT AVAILABILITY

Port Congestion

• European hub ports (due to arrival bunching)
• Asian export hubs (due to slower vessel return cycles)

Equipment imbalance

• Empty container repositioning remains inefficient.

Persistent congestion at:

• Asia continues to experience periodic shortages due to delayed vessel rotations.

Capacity effect

• Effective global capacity is reduced even without vessel loss, because:
• voyages are longer
• turnaround cycles are slower
• Industry estimates still indicate a meaningful capacity drag on global networks

AVIATION SITUATION: Airspace closures and disruption

Middle East airspace

• Continued restrictions or cautionary routing over multiple Gulf and surrounding airspaces, with periodic tightening depending on security events.

Operational impact
Longer flight paths for some Europe–Asia and Europe–Australia routings.

• Increased fuel burn and crew duty time pressure.
• Hub volatility still centred around major Gulf hubs when restrictions intensify.

Cargo impact

• Air freight remains operational but:
• less predictable on scheduling
• more expensive on long-haul routes where detours apply
• Modal shift pressure persists for urgent cargo when ocean delays spike

Key takeaways (current state)

• Global shipping remains structurally disrupted, not temporarily impaired
• Suez and Red Sea are still not functioning as primary trade arteries
• Cape routing is now a semi-normal baseline for planning and pricing
• Freight rates are stable at an elevated plateau rather than peaking
• Insurance, fuel, and contractual surcharges remain embedded in cost structures
• Air freight is also affected, but less severely than maritime flows