Current Market Conditions Across Global Freight – Last reviewed: 20 July 2026

As of 20 July 2026, disruption remains severe across parts of the Middle East and the Red Sea trade corridors. Commercial traffic through the Strait of Hormuz is operating at substantially reduced levels following renewed military escalation and incidents involving commercial vessels. Red Sea and Suez routing also remains subject to rapid carrier reassessment. Businesses should continue to allow for extended lead times, higher insurance and fuel-related costs, restricted capacity and limited schedule flexibility.

(This page reflects conditions at the time of publication and will be updated as carrier, port, airline and insurance positions change.)

1: Red Sea, Suez Canal, Bab el-Mandeb

Current operating environment
Major container carriers continue to operate a materially reduced level of transits through the Red Sea and Suez Canal corridor for Asia–Europe services. The dominant routing pattern remains via the Cape of Good Hope, reflecting ongoing risk-based decision-making rather than physical canal constraints.
This page reflects conditions at the time of publication and will be updated as carrier, port, airline and insurance positions change.

Key developments
Asia–Europe services now operate a mixed routing pattern, with Cape of Good Hope still widely used alongside selective Suez transits depending on carrier risk appetite.

• Some carriers have reduced service frequency or redeployed capacity to reflect extended round voyage times
• Maersk and Hapag-Lloyd announced a limited return of one Gemini service to the Suez route in early July. This remains conditional on security and may be revised following the latest regional escalation.
• Network planning has adjusted to longer voyage assumptions rather than short-term disruption management
• Selective and case-by-case transits through Suez have occurred but remain limited in scope
• Maersk and Hapag-Lloyd returned the AE15 Gemini service to Suez in early July, subject to ongoing security review.

Current assessment
Operational decisions remain driven primarily by security risk assessments. The Cape of Good Hope has become the baseline routing assumption for many schedules.

2: Strait of Hormuz

Current operating environment
The Strait of Hormuz continues to experience severe disruption. Although US and Iranian military activity temporarily eased over the weekend of 25–26 July, commercial vessel movements remain substantially below normal and shipping confidence has not recovered. Transit volumes fell to fewer than ten vessels per day over the weekend, with operators continuing to respond to security threats, naval activity, insurance restrictions and rapidly changing navigational guidance.

Key developments

• Commercial transit volumes have fallen sharply
• Tanker incidents have been reported within or close to the strait
• LNG tanker movements have been particularly restricted
• War-risk insurance, security scrutiny and voyage approvals remain elevated
• Further disruption may occur with little notic

Current assessment
The Strait remains strategically critical, but commercial confidence and transit consistency remain heavily impacted by regional instability. Security risk continues to influence routing, insurance, and transit decisions. Disruption remains driven primarily by geopolitical uncertainty and precautionary operating practices rather than physical infrastructure limitations

3: Cape of Good Hope routing impact

The Cape of Good Hope route remains the primary alternative for Asia–Europe container services affected by Red Sea risk avoidance.

• Key implications
  Voyage durations extended by approximately 10–15 days depending on rotation and port calls
  Increased fuel consumption and higher bunker exposure
  Schedule reliability reduced due to longer cycle times
  Increasingly embedded into medium-term carrier network planning rather than treated solely as short-term contingency routing

Current assessment
For many carriers, Cape routing is no longer being treated as a temporary workaround. It has become part of normal operational planning

4: Freight rates and contracting environment

Market structure
As of mid-July, global container spot rates remained elevated but had begun to ease slightly on some routes. Drewry’s World Container Index fell 2% to approximately $4,547 per 40-foot container during the week ending 16 July. However, renewed Middle East escalation may place further pressure on fuel, insurance and disruption-related charges.

Carrier behaviour
Major carriers, including Maersk, MSC, CMA CGM, and Hapag-Lloyd, continue to apply:

• War risk surcharges on exposed routes
• Conflict-related operational surcharges
• Selective booking acceptance on higher-risk corridors
• Capacity management aligned with extended voyage cycles

Current assessment
Pricing remains elevated on affected trade lanes, but market conditions remain variable rather than uniform across all routes. Short-term volatility persists but is more controlled than peak disruption phases. Carrier leverage remains relatively strong due to ongoing effective capacity absorption linked to extended voyage cycles.

5: Cost structure pressures

Insurance
War risk insurance premiums remain elevated across Middle East and Red Sea-linked exposures. Underwriting conditions remain selective, with enhanced exclusions or restrictions in certain high-risk corridors.

Fuel and bunker exposure
Bunker Adjustment Factors remain sensitive to crude oil volatility
Extended routing via southern Africa continues to structurally increase fuel consumption per voyage

Surcharges
Commonly applied charges include:

• War risk surcharges
• Emergency operational surcharges
• Port congestion-related fees
• Route deviation and disruption-related adjustments

Current assessment
Cost inflation is increasingly embedded within carrier pricing structures, although some elements remain visible as separate surcharges.

6: Supply chain efficiency and equipment flows

Port and network congestion
European hub ports continue to experience periodic congestion due to vessel bunching
Asian export hubs face intermittent pressure linked to slower vessel rotation cycles

Container equipment imbalance

• Empty container repositioning remains inefficient across major trade lanes
• Asia continues to experience episodic equipment tightness due to delayed return cycles

Capacity impact
Despite no significant vessel loss, effective global capacity remains constrained due to:

• Longer voyage durations
• Reduced vessel rotation speed
• Slower container turnaround cycles

Current assessment
The global network continues to operate with reduced efficiency, driven by longer voyage cycles, slower equipment returns and periodic congestion rather than port congestion alone.

7: Air freight and aviation conditions

Airspace environment
Middle East airspace and hub operations remain subject to cancellations, restrictions, reopening decisions and rapid schedule changes. Although some passenger and cargo services have resumed, capacity remains uneven and routings may change with limited notice.

Operational impact

• Some passenger services through Middle Eastern hubs remain suspended or reduced.
• Qatar Airways has suspended services to Bahrain, Erbil and Kuwait until 31 July.
• Selected European and Gulf airline services have also been cancelled, suspended or rerouted.
• Major Gulf hubs remain operational, but individual routes can change rapidly.

Cargo market impact

• Reduced passenger services are affecting belly-hold cargo capacity.
• Capacity and routing should be reconfirmed before booking.

Current assessment
Air cargo remains resilient and operational, but routing, fuel burn, capacity availability and pricing continue to be affected by wider geopolitical conditions, particularly where services rely on Middle East airspace or hub connectivity

Common questions we are currently being asked

Why are ships avoiding the Red Sea?
Many carriers continue to avoid the region due to ongoing security concerns, insurance pressures, and operational risk assessments linked to regional instability.

How much longer does Cape routing take?
Cape of Good Hope routings can add approximately 10–15 days to Asia–Europe transit times depending on schedules, congestion, and weather conditions.

Are air freight costs increasing?
Air freight pricing remains volatile across some trade lanes due to rerouting activity, capacity pressure, and wider disruption across global supply chains.

What does this mean for UK importers?
Many businesses are experiencing longer lead times, fluctuating costs, and reduced schedule flexibility, increasing the importance of planning, communication, and supply chain visibility.

Is the Suez Canal still open?
Yes, the Suez Canal remains operational. However, many shipping lines continue making routing decisions based on security conditions, insurance assessments, vessel schedules, and regional risk exposure. Some carriers are selectively using the route, while others continue routing around the Cape of Good Hope.

Will freight rates return to normal soon?
Freight markets remain highly sensitive to geopolitical developments, vessel availability, congestion, fuel pricing, and carrier capacity management. While some pricing volatility may ease over time, many importers and exporters are continuing to plan around elevated transport costs and longer lead times across key global trade lanes.