Capacity rebound cannot stop the upward trend: The divergence logic of container freight rates on Asian export routes

After the blockage of the Strait of Hormuz triggered by the Iran war, the global container shipping industry had expected that capacity recovery would quickly drive down freight rates. However, data from early July 2026 presents a completely opposite picture: the rebound in capacity did not prevent freight rates from rising but instead pushed them to new highs on the major Asia-to-Europe and Asia-to-Americas routes.

Abnormal Divergence between Capacity and Rates

According to Xeneta's four-week rolling capacity index, weekly capacity on the Asia-to-US West Coast route has reached a record 350,000 TEU, about 10% higher than the same period before the crisis. However, spot rates climbed to $6,639 per FEU on July 3, up 14% week-on-week and 253% above pre-crisis levels at the end of February 2026. A similar situation occurred on the Asia-to-Europe route: although capacity did not fluctuate as dramatically as on the Pacific route, spot rates have rebounded to $5,377 per FEU, up 142% from the low point in early March and about 1.7 times the pre-crisis level.

The Mediterranean and US East Coast routes followed the same trend. Capacity on the US East Coast route increased by 9% week-on-week, with freight rates soaring 215% above pre-crisis levels; capacity on the Mediterranean route increased slightly by 1.7%, with freight rates rising 103% cumulatively since March. Freight rates on the westbound Atlantic route also rebounded, up 7% week-on-week to $2,523 per FEU, 71% higher than before the war.

Geopolitical Aftermath and Supply Chain Security Premium

The phenomenon of "capacity increasing but rates not falling" stems from the fact that geopolitical risks have not completely subsided. Although the interim US-Iran agreement has partially reopened the Strait of Hormuz, Iran still effectively controls vessel passage, and a container ship was attacked off the coast of Oman, leading to a suspension of escort operations. Shipping companies remain highly vigilant about the sustainability of safe passages, and potential disruption risks are directly translated into a security premium in freight rates.

Peter Sand, chief analyst at Xeneta, pointed out: "The trans-Pacific market is overheating. Capacity is at record highs, but spot freight rates are still climbing by double digits. More capacity helps improve the reliability of cargo transportation, but it is not enough to reverse the upward trend." This assessment reveals the core contradiction in the current market: an increase in the number of vessels does not equal the restoration of effective capacity, as factors such as detours, higher insurance costs, and route adjustments continue to suppress actual available capacity.

Peak Season Front-Loading and Shipping Companies' Pricing Strategies

On the demand side, there is also support for freight rate increases. Drewry's trans-Pacific market analysis shows that carriers continue to announce general rate increases (GRI) and peak season surcharges (PSS) in July. HMM will impose a $3,000 PSS on 40-foot containers starting July 15. Drewry believes that early peak season demand, coupled with shipping costs driven up by geopolitical disruptions, has kept container freight rates on the major east-west trade lanes resilient.Shipping lines are turning the supply-demand gap into profit through meticulous capacity management and rate increase strategies. MSC resumed the "Pearl" service on June 13, adding approximately 6,200 TEU of weekly capacity between Yantian and Long Beach; Yang Ming Marine Transport and ONE also launched extra-loader vessels. However, the additional capacity was quickly absorbed by surging cargo volumes, and the market did not see overcapacity.

Long-cycle perspective on supply chain restructuring

This firmness in freight rates is not a short-term phenomenon but a microcosm of global supply chain restructuring. Asia's export routes, as the aorta of global trade, see rate fluctuations that directly reflect manufacturing relocation, inventory strategy adjustments, and regional trade bloc reorganization. Capacity on the US West Coast routes hit record highs, partly due to the nearshoring trend prompting US importers to accelerate stockpiling from Asia to avoid potential trade barriers and voyage risks. Meanwhile, demand on European routes is driven by both post-energy crisis restocking and peak season inventory building.

In the long term, the freight rate center is systematically shifting upward. Geopolitical costs, carbon emission compliance costs, labor costs, and safety stock costs are all being incorporated into shipping pricing models. Even if the Strait of Hormuz fully resumes normal transit, rates will find it difficult to return to the low levels of 2023.

Short-term outlook: Inflection point not yet reached

Xeneta expects spot freight rates on major export routes to Europe and the US to continue rising at least until mid-July. Drewry also believes rates will increase further in the coming weeks, as carriers continue to impose surcharges based on strong cargo volume expectations. The market inflection point may depend on three variables: whether the situation in Iran can achieve lasting stability, whether US import demand will decline after the peak season, and whether the pace of new capacity deployment exceeds cargo volume growth.

Currently, shippers face a dual challenge: ample capacity but high freight rates, and limited improvement in reliability. Supply chain managers must accept high freight rate elasticity as the new normal and find a balance between geopolitical uncertainty and cost control.

Editor's note: This article is independently written based on the Seatrade Maritime News report of July 6, 2026, 'Container rates defy capacity rebound on Asia export trades' and related industry data, aiming to provide in-depth supply chain analysis.

Disclaimer: The data and views contained in this article are for reference only and do not constitute investment or business decision advice. Market conditions are ever-changing, and readers should make prudent judgments based on their own circumstances.