Shipping Prices Remain Soaring
Date:2026-09-08
Middle East Route: Shipping Prices at the Eye of the Storm
If we were to find a microcosm of this round of price hikes, the Middle East route would undoubtedly be the most striking example.
As of early September 2026, shipping prices on the Middle East route had experienced a dramatic surge. Taking Shanghai Port to Dammam Port as an example, the freight rate for a 40-foot standard container jumped from approximately $6,600 to over $10,000 in just over a month, an increase of more than 50%. Even more astonishingly, shipping costs on some routes have exceeded $11,650. Some of these costs even exceeded the value of the goods themselves. An Iraqi merchant lamented that purchasing $10,000 worth of goods resulted in freight charges exceeding $10,000, causing his order volume to plummet by half.
The core driving force behind this is the escalating geopolitical conflict in the Middle East. The obstruction of navigation in the Strait of Hormuz and the Bab el-Mandeb Strait has forced shipowners to drastically reduce capacity and postpone the resumption of routes to mitigate risk, rapidly draining the region's effective shipping capacity. Simultaneously, marine fuel costs have surged by nearly 70%, and insurance premiums have also skyrocketed; these increased operating costs are ultimately passed on to the shipowners. Regarding freight costs:
Multiple factors combined: More than just geopolitics. The across-the-board rise in shipping prices is not a "one-man show" in the Middle East, but a global chain reaction.
First, extreme weather is "closing off" key waterways. Affected by the strong El Niño phenomenon, the Panama Canal is experiencing severe drought, with the Gatun Lake's water level dropping to a historic low. The Canal Authority has had to limit the number of ships passing through daily and reduce the draft of vessels, forcing core routes such as those from the US Gulf to the Far East to be rerouted, lengthening the journey by 16% to 35%, adding up to approximately 13 days one way. Effective shipping capacity was significantly depleted. Meanwhile, typhoons in East China caused severe congestion at major global hubs such as Ningbo and Shanghai ports.
Secondly, the contradiction between nominal overcapacity and effective capacity shortage became more pronounced. Although global fleet capacity has increased by 28% over the past three years, actual demand, calculated in TEUs nautical miles, has increased by 41% due to detours and congestion. Analysts point out that if the Red Sea fully reopens, the overcapacity problem caused by the large number of newly built ships may reappear; however, until then, the pattern of "detours + congestion" will continue to support high freight rates.
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