Negotiations between the United States and Iran aimed at reaching a final peace deal are ongoing, even as military actions continue. Iran has escalated measures to position itself as the sole controlling authority over the Strait of Hormuz going forward, according to a report from Freightos Group.
Read also: Container Freight Rates Surge 23% as Early Peak Season Drives Demand on Major Trade Lanes
Oil shipments from Gulf states are recovering, but marine traffic was halted over the weekend after Iranian strikes on vessels in transit and on sites in Bahrain and Kuwait. Iran has instructed all ships to use only the northern passage of the Strait of Hormuz along the Iranian coast and to coordinate with Iranian authorities. The International Maritime Organization had announced and begun evacuating vessels via the southern route along the Omani coast, but has now suspended that effort after Iran attacked a container vessel that was not using the Iranian lane.
The primary factor driving ocean container rates at present is surging peak-season demand, not oil prices. Spot prices rose only modestly last week across major trade lanes, but the early start of this year’s peak season has caused rates to spike on main east-west routes since mid-May. Carriers are shifting capacity from secondary lanes to meet this demand, which is also pushing up rates on those secondary trades.
Transpacific prices increased 8% to both coasts last week. Rates to the West Coast stand at about $6,200 per FEU, a 120% rise since mid-May. Rates to the East Coast are $8,000 per FEU, an 85% increase over the past six weeks. Asia-to-Europe prices climbed just 2–3% last week, but at $4,900 per FEU to Northern Europe, rates are up 70% since mid-May, and Mediterranean prices of $6,500 per FEU are up 85% over the same period.
Transpacific East Coast rates are now $1,000 per FEU higher than last year’s frontloading-driven summer peak, while West Coast prices are just above their 2025 peak. Rates to Europe and the Mediterranean are $1,300 and $3,000 per FEU above their respective 2025 peak-season highs. Worsening port congestion, partly caused by surging volumes at major hubs in South Asia, the Far East, and Europe, is causing delays, reducing available capacity, and adding upward pressure on rates.
Multiple factors may be driving the early peak-season rush, including frontloading ahead of July Bunker Adjustment Factor (BAF) hikes, manufacturer price increases, and—for U.S. shippers—the approaching tariff deadline. If enough shippers are indeed pulling peak-season volumes forward, the early start could mean an early peak-season unwind, possibly sometime in July. However, delays at congested ports could mean that volume strength extends longer than many shippers might prefer. Carriers are set to introduce more rate increases at the start of July, so the success of those hikes should indicate where the market stands in terms of this year’s peak-season peak.
In air cargo, Gulf carrier capacity and volumes continue a gradual recovery that began soon after the start of the war, though other global carriers still avoid the Middle East. These capacity shifts and reductions, along with fuel costs that remain about 20% higher than before the war, keep the Freightos Air Index global benchmark rate 40% above pre-war and year-ago levels. Even so, rates have come down and mostly leveled off from earlier wartime highs on most lanes. China-to-Europe prices dipped 2% last week to $4.55 per kilogram, roughly the level held since early June and down from an early-May peak of $5.25 per kilogram. China-to-U.S. prices eased 9% last week to $6.60 per kilogram, possibly reflecting a dip in volumes as the Prime Day rush ended.
