Container Freight Rates Jump 130% Since February on Gulf Risk

A reversal that erased a year of relief

Container shipping rates have more than doubled in eight months. A Jefferies report circulated in Indian financial media this week says global container freight rates have risen 130% since February 2026, and it attributes the climb to renewed tensions in West Asia.1315 In Jefferies' figures, the benchmark sat at about $2,000 to $2,500 per container in February and reached roughly $4,000 to $4,500 by October.1420

The increase reverses a long decline. Rates spiked in 2024, then fell from early 2025 as supply and demand moved back into balance. They stayed fairly low into early 2026 before turning up again.1311

Drewry's weekly World Container Index (WCI) supports the scale of the move. In early March the composite stood at $1,958 per 40ft container.7 On October 22 it rose 2% to $4,585, its second weekly gain in a row and its highest reading in 15 weeks.1 That works out to an increase of a little over 130%, so the brokerage's estimate and the index provider's data agree on the headline number.

Where the increase actually sits

The single 130% figure hides very different conditions on different routes. Read closely, the Drewry data suggest the surge is less about one Middle East shock and more about several separate pressures arriving together.

The Transpacific has seen the steepest gains. In early March, Shanghai to New York cost $2,977 per 40ft box and Shanghai to Los Angeles cost $2,402.7 By October 22 those lanes had reached $10,166 and $8,007.1 Drewry links that strength mainly to steady US import demand and to carriers cancelling sailings to limit capacity, not to West Asia.1 In mid-September it still expected Transpacific rates to rise slightly, citing demand ahead of Golden Week and continued capacity management.3

Asia–Europe, the route most exposed to the Red Sea, has moved the other way in recent months. Drewry reported in early October that Asia–Europe rates had fallen for 12 straight weeks because demand was weak. Rising Suez Canal transits were adding effective capacity and pushing rates down further.6 By October 22, Shanghai–Rotterdam had recovered 3% to $3,632 and Shanghai–Genoa 5% to $4,152. Drewry says that bounce came from carriers blanking sailings and adding surcharges, not from a new disruption.1

The Gulf is where the West Asia explanation is most direct. Drewry's Intra-Asia index shows Shanghai to Jebel Ali at $8,451 per 40ft container, and it blames the worsening Middle East situation for keeping that lane high.4 Drewry has also described Iran–US tensions disrupting shipping through the Strait of Hormuz.3 It reported that only two containerships entered the Gulf in Week 42, compared with five the week before, as security risks and attacks on vessels continued.1

The most defensible reading is that West Asia tensions explain part of the 130% but not all of it. Jefferies and the outlets repeating its report give the region as the cause.1217 The route data show a stack of pressures: a Gulf choke point, carriers deliberately managing capacity, firm US demand and high fuel costs. Shippers who treat this as a single geopolitical event that will pass may be misreading their own exposure.

Fuel and congestion add to the bill

The cost problem goes beyond the freight rate. Drewry notes that Brent crude has stayed near $100 a barrel since early October. High bunker costs and the US–Iran standoff are raising carriers' operating costs, and those costs are passed on in rates and surcharges.4 Other coverage of the Jefferies report also points to high fuel costs, ongoing congestion and geopolitical tension as reasons rates may not fall quickly.18

Congestion has eased somewhat, which offers a little relief. Drewry measured vessel waiting times at Shanghai dropping from 97 hours in Week 38 to 38 hours in Week 42.1 It also noted that the Golden Week slowdown gave ports time to clear backlogs and improve schedule reliability.4 Not every port improved: average waits at Busan rose from 23 to 31 hours in Week 42, and Singapore went from 10 to 12 hours.4 Earlier this year, Drewry recorded Shanghai waiting times jumping from 35 to 96 hours in a single week.3 That kind of volatility makes it hard to plan inventory buffers.

The Suez question

The analysis and the reporting agree on what matters most next: whether container lines return to the Suez Canal in large numbers. Jefferies calls the possible return a "key monitorable," even with Middle East tensions continuing.1215

The return has already started. Industry figures cited by Seatrade Maritime show an average of 753,000 TEU of weekly container capacity moving through the canal in the first two weeks of October. That is just over half the 2023 level of 1.457 million TEU.18 BIMCO estimates that diverting ships around the Cape of Good Hope raised global container shipping demand by about 10%. Bringing those ships back would therefore free up a significant amount of capacity.18 Linerlytica expects a full return to the Suez route by the first quarter of 2027.18

Drewry's weekly counts show the same gradual trend. Suez transits went from 41 in Week 37 to 48 in Week 38, and from 54 in Week 41 to 55 in Week 42.31 In Week 39, transits were 68% higher than in the same week a year earlier.6 Drewry tracks the change through its Red Sea Diversion Tracker, which compares weekly containership traffic through Suez with traffic around the Cape.9

The coverage diverges on what happens next. Some reporting treats a Suez return as a clear signal that rates will fall.11 Drewry is more cautious. It calls the East–West market uncertain and says the outlook depends on demand, how carriers adjust capacity and regional security.1 Analysts quoted in Indian coverage warn that new attacks could undo the progress toward normal Red Sea services.18

One point weakens the case for quick relief. A Suez return mainly frees capacity on Asia–Europe, which is already the softer lane. It does little for Transpacific rates, which depend on US demand, or for Gulf rates, which depend on Hormuz. The capacity that comes back could put the most pressure on rates that have already fallen, while the most expensive routes stay expensive.

Trade is holding up so far

India illustrates the cost-pressure argument well, because its trade data look strong. Jefferies reports that India's containerisable export-import trade rose 23% year on year in September, with exports up 22% and imports up 23%.1320 Exports to the United States grew 48%. Exports to the UAE and Saudi Arabia fell 12% to 15%.1415 That fall in Gulf-bound shipments is consistent with Drewry's reports of very little shipping entering the Gulf, though Jefferies does not explicitly connect the two.

Several outlets stress that the figures do not show higher freight rates have yet slowed India's trade growth.1320 Port data are mixed. Volumes at major ports rose 13% year on year in September, while non-major ports fell 1%. Within that group, Gujarat grew 3% and Maharashtra and Tamil Nadu grew 6% to 7%. Ports on the eastern coast saw a sharp drop.1116

Freight costs usually affect profit margins before they affect volumes. Higher ocean rates raise landed costs for importers and cut into the margins of exporters who cannot pass costs on to buyers.11 The September volume figures mostly reflect orders placed and priced before the latest increase, so they say little yet about how margins are holding.

What shippers should take from this

Carriers now control much of the supply side, and they are using that control. In September, Drewry counted 15 blank sailings announced on the Transpacific for one week.3 Around the same time, carriers tried to push through higher FAK ("freight all kinds") rates on Asia–Europe after Golden Week.6 For the week after October 22, Drewry noted eight blank sailings on Asia–Europe, up from two, which points to tight capacity. It expects rates on that route to rise slightly.1

For procurement teams, the 130% figure matters less than the gaps between routes. Exposure to the Gulf, the Transpacific and Asia–Europe now carries three different risks, each with its own trigger. Contracts linked to a single composite index may not price those risks well. A fuller Suez return could bring prices down on one lane while the Hormuz situation, oil near $100 and US demand keep the others high. Rates are unlikely to fall back to where they were in February anytime soon.