Ocean freight market update: Strong demand and Red Sea diversions keep container rates elevated

The global container shipping market has entered the second half of 2026 with stronger-than-expected momentum. Despite the continued delivery of new vessels, freight rates remain well above historical averages as strong cargo demand, Red Sea diversions and constrained effective capacity continue to support the market.

According to latest Ocean Freight Market Update, global container demand has increased by 4% year-to-date, while year-on-year demand growth has returned to 3%. Although carriers continue to expand fleet capacity, longer voyage distances around the Cape of Good Hope and intermittent port congestion are absorbing much of the additional capacity entering the market.

The latest Drewry World Container Index (WCI) reflects this resilience. As of 9 July 2026, the composite index stands at US$4,639 per 40-foot container, up 2% from the previous week. Freight rates on major east-west trade lanes also remain firm:

The Red Sea remains the single biggest factor shaping global shipping networks. Most major container carriers continue routing vessels around the Cape of Good Hope, adding several thousand nautical miles to each round voyage. These longer transit times require additional vessels to maintain weekly schedules, effectively reducing available capacity despite fleet expansion.

At the same time, carriers have largely avoided aggressive blank sailing programmes. Instead, they are deploying available capacity to capture sustained demand while implementing General Rate Increases (GRIs) and Peak Season Surcharges (PSS) on selected trade lanes.

Space availability

Booking conditions vary by region, but space is becoming tighter on several major routes.

• Asia–Europe: Space is tightening, with advance bookings recommended for July and August shipments.

• Asia–North America: Demand remains healthy, and premium equipment and priority allocations are becoming more common.

• Indian Subcontinent exports: Capacity remains relatively stable, although shipments to Europe continue to experience longer transit times due to Red Sea diversions.

Unlike the severe equipment shortages experienced during the pandemic, today's market is characterised by capacity availability with operational constraints, rather than a lack of vessels.

Market outlook

One of the biggest concerns entering 2026 was that record deliveries of new container ships would trigger a sharp decline in freight rates. While fleet growth has certainly increased nominal capacity, operational realities have changed the equation.

Red Sea rerouting, longer voyage cycles, resilient export demand from Asia and selective carrier capacity management have prevented the market from moving into oversupply. Effective capacity—not just fleet size—has become the key indicator influencing freight rates.

Unless security conditions improve significantly in the Red Sea or global demand weakens unexpectedly, container freight rates are likely to remain firm through the current peak shipping season. Weekly fluctuations are expected, but the market continues to favour carriers more than many analysts anticipated at the beginning of the year.

For exporters, importers and freight forwarders, early booking, flexible routing and close monitoring of carrier schedules will remain essential as global supply chains continue to operate in an environment shaped more by geopolitical uncertainty than by vessel availability.