Supply Chain Disruptions Shift From Ocean Rates to Diesel Costs

Container rates ease, but costs are still rising

In early October, the main measure of ocean freight costs started to slip. Meanwhile, nearly every other part of the cost of moving goods kept climbing. Shippers are dealing with an odd mix as the fourth quarter begins. Spot container rates are drifting down. A threatened German port shutdown has been called off. But diesel prices are near record highs, ports in China are congested, rivers are running too low for barges, and labour disputes keep breaking out from Italy to the Caribbean. The ocean freight market may be past its worst. The cost of getting goods from factory to shelf is not.

Drewry's World Container Index fell 2% to $4,351 per 40ft container on 8 October. Drewry linked the drop to softer demand on both the Transpacific and Asia-Europe routes during China's Golden Week holiday.1 The week before, the index had dipped 1% to $4,434.2 On the surface, that points to relief. Over a longer period it does not: the composite was still about 132% above its September 2025 level as of early October, after a low of $1,651 last October and a high of $4,526 in August.4

Two very different ocean markets

The single index number hides a split between routes, and every major tracker shows the same split. On Asia-Europe, Drewry says spot rates have now fallen for 13 weeks in a row. Shanghai to Rotterdam slipped to $3,337 per box, and Shanghai to Genoa held at about $3,696.6 The NYSHEX Asia-North Europe reading has dropped about 25% since early August.8 The cause is extra capacity. Suez Canal transits in week 39 were 68% higher than in the same week a year earlier, and every ship that goes through the Red Sea instead of around Africa adds effective capacity to the trade.2 Reports say almost all major carriers are getting ready to send Asia-Europe sailings back through Suez, with some alliance ships scheduled through the Red Sea from November.9

The Transpacific is a different picture. Shanghai to New York was still above $10,000 per container, at $10,220, and Shanghai to Los Angeles was at $7,624 after a 3% weekly fall.6 Freightos put Asia to US West Coast spot rates at $8,322 per forty-foot container and East Coast rates at $9,606 as of 6 October.18

This is where the trackers disagree. Freight forwarder WOWL said Transpacific eastbound rates were "still rising" despite Golden Week, and that Shanghai and Ningbo bookings to the US West Coast were effectively full through mid-October.19 Xeneta takes the opposite view: it says Far East to US spot rates have already hit their post-Hormuz peak for 2026.9 Drewry is in between and expects rates to stay stable next week.1 Our reading is that Xeneta and Drewry have the direction right and WOWL has the near-term situation right. The NRF's Global Port Tracker says the long, tariff-driven US import peak is winding down.18 WOWL itself expects rates to soften further, with good capacity, through Q4 and into Q1 2027.19 Shippers with cargo leaving China this month will still struggle to find space. Shippers negotiating early 2027 contracts should have more leverage.

Carriers are pushing back. They plan to raise FAK (freight all kinds) rates on Asia-Europe in the second half of October, though Drewry doubts the increases will hold.6 Maersk has added peak season surcharges on several Asian routes.20

Congestion is the hidden cost

In our view, spot rates are a weaker guide to what shipping really costs this autumn than schedule reliability is. A series of typhoons has brought congestion back to Chinese ports. Waits are estimated at six to 12 days, and Maersk has warned that delays could spread across its network. DHL Global Forwarding estimates that congestion is taking up 12% of effective vessel capacity.11 One count showed 157 vessels waiting at berth in Shanghai in mid-September.18 WOWL ranks Shanghai, Colombo and Ningbo-Zhoushan as its top three ports to watch for delays, and estimates rail dwell times of about eight days at Los Angeles.19

For importers, this means costs that never show up in a freight rate: safety stock, missed sales and expedited replacement shipments. It also means a sharp drop in vessel bunching could suddenly flood ports with capacity. WOWL warns that Golden Week capacity on Asia-North Europe is more than 25% above last year, partly because delayed ships are arriving together, and expects more blank sailings in late October.19

Port labour: one threat ends, others appear

The biggest labour risk in Europe has eased. Ver.di's bargaining commission accepted the employers' offer for about 11,000 workers at Hamburg, Bremen, Bremerhaven, Emden, Brake and Wilhelmshaven. The deal gives a 3.4% hourly raise over 12 months, backdated to 1 August, plus extra holiday pay and allowances. Employers still have to approve it.37 The union had asked for 8.2%, so it settled for well under half of what it wanted.26 In September it had looked ready to escalate after 64.7% of surveyed members rejected the same offer.26 We read the outcome as a sign that the union could not credibly reach its own 75% threshold for indefinite strikes, more than as a win for either side.

The disruption that has already happened has not gone away. Bremerhaven yard use was still around 90% after the deal, against 80-85% at Hamburg. Earlier in the dispute, a 48-hour stoppage at Wilhelmshaven cut weekly terminal capacity by more than 30%, and Rotterdam's ECT terminal reported 93% yard occupancy.34

Labour disputes elsewhere filled the gap. On 28 September, Italy's USB Mare e Porti union held a 24-hour national strike that hit Genoa, Livorno, Gioia Tauro and Civitavecchia. The unions want port work recognised as arduous for pension purposes, and they oppose a reform that would let terminals hire temporary workers through agencies.21 Because the government has not yet set a date for the promised technical committee, more action is likely.30 In Jamaica, more than 1,000 workers stopped operations at Kingston Freeport Terminal on 9 October in a dispute over which union represents them, leaving cranes idle and trucks stuck in queues.24 At Chattogram in Bangladesh, workers threatened a hunger strike over a terminal concession signed with DP World.29 None of these is on the scale of the German dispute, but together they show that dock labour is a widespread and continuing risk.

Fuel and rivers are driving costs up

If there is one story that explains rising logistics costs this autumn, it is energy. The Strait of Hormuz has been closed to shipping since war broke out on 28 February. Brent crude traded at $107 in mid-September, $50 higher than a year earlier. The US Energy Information Administration reported diesel at $6.529 a gallon on 21 September.11 AAA recorded a record national average of $6.53, about 72% higher than a year earlier, before it eased to $6.39.15 FreightWaves counted at least 16 US trucking and transport companies filing for bankruptcy between late August and 21 September, mostly small operators caught between fuel costs and freight rates that have not kept up.15 Larger carriers are feeling it too: J.B. Hunt was reported to have given an informal earnings warning, which the company has not confirmed.11

Low water is now a constraint across the system as well. The Kaub gauge on the Rhine has spent 74 days this year below the point where barges have to cut their loads sharply, against a previous record of 41 days in 2022.11 Maersk has warned that barge transport may become unworkable. The Panama Canal cut daily transits from 36 to 32 during what should be its rainy season.11 It is adding a slot from 15 October, but its reservoirs remain at critical levels.19

Shortages and shelf prices

These costs are now feeding into retail prices. In the Chartered Institute of Procurement & Supply's Q3 survey, 23% of respondents expect food and beverage prices to rise by at least 10% next quarter. The institute's chief economist argues that businesses are now paying more for both raw materials and transport, so the problem can no longer be fixed by simply rerouting shipments.13 In electronics, a shortage of memory chips driven by AI demand pushed global PC shipments down about 20% year on year in Q3, and Omdia expects a 24% drop next quarter.14

Taken together, October's picture is clear. Ocean freight has stopped being the main source of supply chain inflation. Fuel, inland transport, congestion and labour friction have taken its place, and none of them shows up in a weekly container index. Shippers celebrating lower Asia-Europe spot rates may find the savings eaten up by diesel and delays before their goods reach a warehouse.