The US-Iran conflict is impacting global supply chains: container freight rates from Asia to the US have doubled, exacerbating inflationary pressures.
2026-06-11 09:47:17
Since the outbreak of the conflict between the US and Iran, the cost of shipping a single container from Asia to the United States has doubled. This increase is driven by both soaring fuel prices and increased demand from importers, who fear that freight rates will rise further as the conflict continues.
"To understand the transmission path of the current energy crisis, focusing on the container shipping market is more timely than focusing on the oil market. Although the Middle East conflict poses a short-term risk of disruption to shipping, we believe that the current rise in freight rates lacks fundamental support from strong demand, and past experience suggests that such a surge will be short-lived," Morgan Stanley noted in a recent research report.
The bank maintained its "underweight" rating on the global container shipping sector, emphasizing that while the market tightening in 2026 will exceed expectations, it will be insufficient to offset the industry's structural overcapacity. Soaring freight rates could further push up the already high inflation rate in the United States, reflecting the severe challenges faced by the Trump administration following its war with Iran.
U.S. Energy Secretary Chris Wright said on Friday that a deal with Iran is ultimately needed to restore more oil shipments through the Strait of Hormuz in order to lower fuel prices.
According to the latest weekly report from the Drewry World Container Index (WCI), the non-contract spot freight rate for a 40-foot container from Shanghai to Los Angeles was $4,565 on Thursday, while the freight rate from Shanghai to New York was $5,505.
This means that since the outbreak of the conflict in Iran at the end of February, spot freight rates from Asia to the United States have increased by nearly 100% in just over three months, reflecting the severe impact of geopolitical shocks on global supply chains.
Data from Xeneta and Drewry cross-validates this trend. Both organizations' monitoring shows that freight rate increases are accelerating—the increase was relatively moderate in March, but significantly widened in April as the conflict with Iran continued to escalate, and has further accelerated since May.
Analysts point out that this closely matches the rising trajectory of marine fuel prices and is also driven by importers' advance stockpiling. Many US importers are worried that a prolonged conflict will lead to further increases in freight rates, thus accelerating their procurement pace. This "rush" behavior itself has pushed up spot freight rates.
However, the current shipping costs of $4,565 to $5,505 are still far below the historical high of $16,000 reached at the beginning of the COVID-19 pandemic. Between 2020 and 2022, a surge in panic buying by homebound consumers, coupled with port congestion and labor shortages, pushed shipping costs to unprecedented heights.
In contrast, this round of price increases is more driven by supply-side costs—namely, soaring fuel prices and rerouting routes—rather than by an explosive growth in demand. Therefore, most shipping analysts believe that even if the conflict continues, freight rates are unlikely to reach the extreme peaks seen during the pandemic, but a return to pre-conflict levels in the short term is equally improbable.
The conflict between the US and Iran has lasted for over 100 days, with no end in sight, severely hindering oil transport through the Strait of Hormuz. This strait is a crucial shipping route for nearly 20% of the world's oil supply, with over 20 million barrels of crude oil passing through this narrow waterway daily to destinations around the world.
Since the outbreak of the conflict, Iran has conducted military exercises and patrols in the area on multiple occasions, which has effectively restricted the normal passage of oil tankers. Many international shipping companies have suspended or detoured through the area, resulting in a surge in both transportation time and costs.
As a result, global oil inventories and emergency reserves are declining rapidly. The latest data from the International Energy Agency (IEA) shows that commercial oil inventories in OECD countries have fallen to their lowest level since 2014, while the release of strategic oil reserves is accelerating.
Fuel analysts and shipping experts warn that even if Trump manages to reach a quick agreement with Iran, it could take about a year for marine fuel supplies to return to normal.
This is because supply chain adjustments cannot be made overnight—the route around the Cape of Good Hope has replaced the Strait of Hormuz as the main passage, and ship owners need time to replan routes and adjust capacity layouts, while refineries also need time to reconfigure to adapt to the supply of different grades of crude oil.
Currently, there is no widespread shortage of marine fuel, but supplies have decreased and are being redistributed to regions less affected by the Iran war. For example, fuel oil that was originally shipped to Europe and Asia via the Strait of Hormuz is increasingly being diverted to markets in the Americas and Africa.
While this regional supply rebalancing avoided a global supply disruption, it also drove up fuel prices in specific regions and exacerbated freight rate volatility.
According to data from Ship & Bunker, a global marine fuel price provider, the price of ultra-low sulfur fuel oil (VLSFO) rose to $845 on Tuesday at 20 major bunkering hubs, a 55% increase since the start of the conflict in Iran, due to supply chain disruptions and cargo owners stocking up in advance.
UBS Asia transportation analysts point out that fuel costs are typically one of the largest cost items in the transportation industry. For airlines, fuel accounts for approximately 30% of total operating expenses, while for shipping companies, fuel costs account for an even higher percentage, reaching around 60% of voyage costs. To alleviate cost pressures, shipping companies have responded by raising freight rates, imposing emergency fuel surcharges, and cutting less profitable routes.
Philip Damas, General Manager of Supply Chain Consulting at Drewry, pointed out that liner companies have been actively raising prices since May, with freight rates on European and North American routes increasing by a cumulative 50-65% in May. Recently, several liner companies have successively announced new rounds of price increases for June, actively restoring freight rates before the peak season, especially to alleviate operational pressures under high oil prices.
However, Damas also warned that trade growth in the second half of the year may slow due to the early release of demand, as market sentiment remains weak, and trans-Pacific container volumes will decline from the third quarter onwards, which could trigger a more significant correction in freight rates.
He stated bluntly: "The container shipping market has essentially entered a cyclical downturn, and the temporary rise in freight rates is driven only by disruptive shocks, rather than genuinely strong demand."
Shipping freight rates have doubled, potentially exacerbating inflationary pressures.
"To understand the transmission path of the current energy crisis, focusing on the container shipping market is more timely than focusing on the oil market. Although the Middle East conflict poses a short-term risk of disruption to shipping, we believe that the current rise in freight rates lacks fundamental support from strong demand, and past experience suggests that such a surge will be short-lived," Morgan Stanley noted in a recent research report.
The bank maintained its "underweight" rating on the global container shipping sector, emphasizing that while the market tightening in 2026 will exceed expectations, it will be insufficient to offset the industry's structural overcapacity. Soaring freight rates could further push up the already high inflation rate in the United States, reflecting the severe challenges faced by the Trump administration following its war with Iran.
U.S. Energy Secretary Chris Wright said on Friday that a deal with Iran is ultimately needed to restore more oil shipments through the Strait of Hormuz in order to lower fuel prices.
Latest shipping data: Prices have more than doubled, but are still far below the peak of the pandemic.
According to the latest weekly report from the Drewry World Container Index (WCI), the non-contract spot freight rate for a 40-foot container from Shanghai to Los Angeles was $4,565 on Thursday, while the freight rate from Shanghai to New York was $5,505.
This means that since the outbreak of the conflict in Iran at the end of February, spot freight rates from Asia to the United States have increased by nearly 100% in just over three months, reflecting the severe impact of geopolitical shocks on global supply chains.
Data from Xeneta and Drewry cross-validates this trend. Both organizations' monitoring shows that freight rate increases are accelerating—the increase was relatively moderate in March, but significantly widened in April as the conflict with Iran continued to escalate, and has further accelerated since May.
Analysts point out that this closely matches the rising trajectory of marine fuel prices and is also driven by importers' advance stockpiling. Many US importers are worried that a prolonged conflict will lead to further increases in freight rates, thus accelerating their procurement pace. This "rush" behavior itself has pushed up spot freight rates.
However, the current shipping costs of $4,565 to $5,505 are still far below the historical high of $16,000 reached at the beginning of the COVID-19 pandemic. Between 2020 and 2022, a surge in panic buying by homebound consumers, coupled with port congestion and labor shortages, pushed shipping costs to unprecedented heights.
In contrast, this round of price increases is more driven by supply-side costs—namely, soaring fuel prices and rerouting routes—rather than by an explosive growth in demand. Therefore, most shipping analysts believe that even if the conflict continues, freight rates are unlikely to reach the extreme peaks seen during the pandemic, but a return to pre-conflict levels in the short term is equally improbable.
Marine fuel prices have soared, and supply recovery may take a year.
The conflict between the US and Iran has lasted for over 100 days, with no end in sight, severely hindering oil transport through the Strait of Hormuz. This strait is a crucial shipping route for nearly 20% of the world's oil supply, with over 20 million barrels of crude oil passing through this narrow waterway daily to destinations around the world.
Since the outbreak of the conflict, Iran has conducted military exercises and patrols in the area on multiple occasions, which has effectively restricted the normal passage of oil tankers. Many international shipping companies have suspended or detoured through the area, resulting in a surge in both transportation time and costs.
As a result, global oil inventories and emergency reserves are declining rapidly. The latest data from the International Energy Agency (IEA) shows that commercial oil inventories in OECD countries have fallen to their lowest level since 2014, while the release of strategic oil reserves is accelerating.
Fuel analysts and shipping experts warn that even if Trump manages to reach a quick agreement with Iran, it could take about a year for marine fuel supplies to return to normal.
This is because supply chain adjustments cannot be made overnight—the route around the Cape of Good Hope has replaced the Strait of Hormuz as the main passage, and ship owners need time to replan routes and adjust capacity layouts, while refineries also need time to reconfigure to adapt to the supply of different grades of crude oil.
Currently, there is no widespread shortage of marine fuel, but supplies have decreased and are being redistributed to regions less affected by the Iran war. For example, fuel oil that was originally shipped to Europe and Asia via the Strait of Hormuz is increasingly being diverted to markets in the Americas and Africa.
While this regional supply rebalancing avoided a global supply disruption, it also drove up fuel prices in specific regions and exacerbated freight rate volatility.
Fuel costs account for 60% of voyage costs, and shipping companies are taking multiple measures to cope.
According to data from Ship & Bunker, a global marine fuel price provider, the price of ultra-low sulfur fuel oil (VLSFO) rose to $845 on Tuesday at 20 major bunkering hubs, a 55% increase since the start of the conflict in Iran, due to supply chain disruptions and cargo owners stocking up in advance.
UBS Asia transportation analysts point out that fuel costs are typically one of the largest cost items in the transportation industry. For airlines, fuel accounts for approximately 30% of total operating expenses, while for shipping companies, fuel costs account for an even higher percentage, reaching around 60% of voyage costs. To alleviate cost pressures, shipping companies have responded by raising freight rates, imposing emergency fuel surcharges, and cutting less profitable routes.
Philip Damas, General Manager of Supply Chain Consulting at Drewry, pointed out that liner companies have been actively raising prices since May, with freight rates on European and North American routes increasing by a cumulative 50-65% in May. Recently, several liner companies have successively announced new rounds of price increases for June, actively restoring freight rates before the peak season, especially to alleviate operational pressures under high oil prices.
However, Damas also warned that trade growth in the second half of the year may slow due to the early release of demand, as market sentiment remains weak, and trans-Pacific container volumes will decline from the third quarter onwards, which could trigger a more significant correction in freight rates.
He stated bluntly: "The container shipping market has essentially entered a cyclical downturn, and the temporary rise in freight rates is driven only by disruptive shocks, rather than genuinely strong demand."
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