TPM26: War a problem for container shipping, but not ‘pandemic-scale’: analyst

“This is going to sound weird. Globally, strictly on container shipping, it’s a problem, but it’s not a major problem,” Jensen told conference attendees. “It’s definitely not pandemic-scale.”

When Houthi militants in Yemen began their attacks on shipping in the Red Sea two years ago, container ships serving the Asia-Europe, Asia-Mediterranean and Asia-US East Coast trade lanes were forced to make lengthy and costly diversions around the southern tip of Africa. The current danger zone in the Middle East is much more limited.   “In this case, it is … ‘only’ the cargo in the Gulf. So from a global perspective, yes there will be an impact,” Jensen said. “It will contract capacity some, but it’s not a major disaster for the countries in the Gulf.”

Looking at the volume of containers destined for the Strait of Hormuz, either on board vessels already or at least booked within the next 90 days to head toward the Gulf, approximately 2 million TEUs will be impacted, he said. A significant portion of that total will be offloaded at ports around the Strait of Hormuz.

The war, meanwhile, has put to rest the assumption importers had entering 2026 that container traffic from Asia bound for Europe and the US East Coast would return to the Suez Canal in the second half of this year, thereby reducing carriers’ leverage in pricing.     “The baseline outlook for 2026 now has to include the assumption that the deviations around Africa will continue this year, and therefore materially strengthen the supply and demand balance,” Jensen said.

As for when container ships will contemplate returning to the Suez Canal, he said that discussion has been kicked down the road for at least another six months.
“So realistically, we are probably looking at least six months into the future before anybody is going to start contemplating doing this again, and that is if we stop the war basically today,” Jensen said.

Major container lines have mostly avoided the Red Sea/Suez route since late 2023, when Houthi militants began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing the diversions around southern Africa. Those attacks stopped last October after the ceasefire agreement between Israel and Hamas, prompting some major carriers to resume transits through the volatile area on a small scale in recent months.

In the short term, oil prices, and therefore bunker fuel prices, will increase, which will impact container shipping costs. And that means ocean carriers will respond with increased fuel surcharges.

“On account of the Middle East, the carriers will go gangbusters in terms of implementing as many and as high surcharges as humanly possible, and not just on trades to and from the Gulf, [but] everywhere,” Jensen said. “They will be called emergency fuel surcharges, emergency conflict surcharges, and whatever nice names, but they will be a reality. The only question is, how high will it go and how long will it last.”

Even cargo owners who are shipping only from Asia to the US West Coast will feel an impact from events in the Middle East in terms of surcharges and disrupted operations in the form of knock-on congestion.

“You’re going to get all of these congestion effects in Asia that [are] going to impact everything and everyone, so you’re going to see these surcharges also on the Pacific,” Jensen said.