Dear Valuable Customer,
At Freight Systems, we remain committed to keeping our customers informed about developments that may impact supply chains across the ME. The recent easing of geopolitical tensions & anticipated reopening of the Strait of Hormuz have improved market sentiment. However, elevated war-risk insurance premiums, equipment shortages, & limited vessel capacity mean freight rates are expected to remain firm in the near term, with gradual recovery.
Summary
- Easing geopolitical tensions and the anticipated Strait of Hormuz reopening have improved sentiment, but rates stay firm near-term.
- Available capacity is running at ~40,000 TEU/week vs. a pre-crisis ~100,000 TEU, with recovery to 50,000–60,000 TEU expected by July.
- War-risk premiums, vessel repositioning and equipment shortages keep costs elevated and rates volatile, with frequent revisions and rollovers possible.
- Equipment is tight, especially 40′ High Cube, reefer and special equipment — early reservation is strongly advised.
- Outlook: rates stable-to-firm short term; possible softening in July–August if war-risk premiums and capacity continue improving.
- Action: book early (Gulf destinations especially), keep routing flexible, confirm equipment, and clarify war-risk surcharges upfront.
Current Market Situation
| Market Factor | Current Situation | Expected Impact |
| Maritime Operations | Phased reopening of routes | Progressive service restoration |
| War-Risk Costs | Elevated premiums remain | Continued upward cost pressure |
| Capacity Levels | Below historical averages | Limited space availability |
| Container Supply | Emerging equipment shortages | Reduced booking flexibility |
| Port Operations | Alternative gateways in use | More transshipment solutions |
| Carrier Strategy | Spot pricing, short-term commitments | Continued rate volatility |
Why Freight Rates Are Not Expected to Decline Immediately
Costs remain elevated due to war-risk insurance, emergency surcharges, vessel diversion & repositioning, crew safety requirements, congestion delays, equipment repositioning, & reduced schedule reliability likely to persist until carriers & insurers regain confidence in the region’s stability. Expect continued cost pressure, frequent rate revisions, longer booking lead times, possible rollovers/routing changes, ongoing surcharges, & selective space allocation.
Capacity Recovery Snapshot
| Capacity Metric | Weekly Capacity (Approx.) |
| Pre-Crisis Market Capacity | 100,000 TEU |
| Current Available Capacity | 40,000 TEU |
| Expected Capacity by July | 50,000 – 60,000 TEU |
| Additional Capacity Planned | 5,000 TEU |
Recovery remains impacted by port omissions, blank sailings, vessel repositioning delays, gateway congestion, equipment shortages, and carrier prioritization of higher-yield cargo.
Equipment Availability Remains a Key Concern
| Challenge | Operational Impact |
| Empty Container Imbalances | Reduced equipment availability |
| High Repositioning Costs | Increased operating expenses |
| Delayed Equipment Returns | Longer lead times for allocation |
| Congestion at Alt. Gateways | Slower equipment circulation |
| Rising Asia Export Demand | Increased pressure on container supply |
Particular pressure on 40′ High Cube, reefer, & special equipment. Customers are advised to reserve equipment asap.
Alternate routes and Spot Market
Carriers continue leveraging alternative gateways (Sohar, Khorfakkan, Fujairah, Jeddah, Red Sea ports) plus bonded trucking and feeder solutions where direct Gulf services are constrained. With lines favoring spot/FAK pricing over long-term contracts, expect limited rate stability, short quotation validity, variable surcharges, selective booking acceptance, premium costs for guaranteed space, and reduced contract protection.
Carrier and Market Updates
| Carrier | Market Development |
| MSC | Strong demand; space remains tight |
| CMA CGM / Ocean Alliance | High utilization on UAE and Sohar services |
| Maersk | Monitoring developments; selected restrictions remain |
| HMM | Additional capacity entering service |
| ESL | Expanding weekly capacity |
| ONE | Increasing participation and service offerings |
| KMTC & GFS | Supporting additional feeder and direct services |
| RCL | Resumed acceptance for selected UAE/Sohar destinations |
Project/breakbulk cargo should be planned earlier, with route risk, insurance, & port handling reviewed in advance.
Operational Risks to Monitor
While market conditions are improving, customers should continue monitoring the following operational risks:
| Area | Key Risks |
| Ocean Freight | Booking restrictions, short rate validity, rollovers, blank sailings, port omissions, equipment/reefer-DG shortages |
| Air Freight | Capacity pressure from modal shifts, rate increases, airport congestion |
| Road & Cross-Border | Higher bonded trucking demand, border delays, corridor congestion |
| Customs & Documentation | Documentation errors, clearance delays, demurrage/detention exposure |
Verify shipment data, consignee details, HS codes, and routing instructions before cargo movement to avoid delays.
To minimize disruption, we recommend booking early (especially for Gulf destinations), maintaining routing flexibility, confirming equipment availability in advance, clarifying war-risk surcharges in quotations, reviewing Incoterms and insurance coverage, and ensuring cargo readiness before cut-offs. Freight Systems continues to monitor port developments, and routing opportunities across the Middle East, & can support customers with ocean & air freight bookings, alternative routing, trucking, LCL/consolidation, customs clearance, & end-to-end supply chain planning. We encourage customers to share shipment forecasts early to help secure capacity, equipment, & competitive pricing.
Regards,
Team Freight Systems
