September 16, 2026 • 8 mins
Welcome back to Container Bytes! đź“Ť Julia Frohwein and Judah Levine return to dissect a crucial week in global freight and energy logistics.
In this episode, we evaluate the newest operational flashpoint in the Middle East. Houthi forces have seized direct control of a coastal port and island right on the Bab el-Mandeb Strait. With crude and bunker fuel prices rebounding to May highs and China’s strategic reserves wearing thin, we explore whether the market is shifting from high fuel costs into an actual fuel supply shortage.
Despite these escalating security threats, ocean carriers are pushing ahead with Red Sea transits. According to Sea Intelligence, more than a quarter of total Asia-Europe capacity is now routing through the Suez Canal—led by Asia-Mediterranean services—as high bunker fuel costs and chronic port congestion make the longer Cape of Good Hope detour difficult to sustain. We analyze how this capacity injection has driven Asia-Med spot rates down to $3,800/FEU, achieving parity with Asia-North Europe.
Finally, we look at the Transpacific market as carriers prepare blank sailings ahead of Golden Week, and unpack why non-seasonal AI data center hardware moving out of Taiwan and South Korea is keeping air cargo capacity tight and baseline rates elevated.
Chapters:
- 00:00:00 — Red Sea Escalation: Houthis seize strategic port and island on the Strait.
- 00:01:45 — Fuel Shortage Threat: Rebounding energy prices and depleting strategic reserves.
- 00:02:33 — The Red Sea Pivot: Over 25% of Asia-Europe capacity returns to Suez routes.
- 00:03:39 — Rate Parity: Asia-Med spot prices fall to $3,800/FEU alongside North Europe.
- 00:05:13 — Transpacific Stability: Golden Week blank sailings and Far East port congestion.
- 00:06:43 — UK Air Outage: ATC breakdown recovery and global air freight benchmarks.
- 00:07:57 — AI Hardware Boom: Non-seasonal data center cargo tightens Transpacific air lanes.
This podcast is a little experiment from Freightos—and may not be around forever—so if you dig quick bites of freight wisdom, let us know.
For more detailed weekly freight updates delivered straight to your inbox, check out our weekly freight email. Want the freshest freight data on demand? Hit up terminal.freightos.com.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:01):
Hi there and welcome to today's episode of Container
Victoria.
Your ten minute update on thelatest integrator.
I'm Julia Frowe, as alwaysjoined by Judah Levine of Radio.
Judah, how are you doing?
SPEAKER_01 (00:12):
Good.
How are you?
SPEAKER_00 (00:14):
Yeah, I'm doing okay, thank you.
So let's kick off.
There's new drama in the MiddleEast this time from the Houthis
as they've taken control of aport and island directly on the
Red Seas of Balmandem straight.
What could this mean forcontainer shipping?
SPEAKER_01 (00:27):
So the Houthis basically until now have been in
control of uh elevated ground,maybe a few tens of miles away
from the coast.
Um and now they have seas, kindof these strategic port and on,
which are directly on um thestrait, which is that very
narrow part of the Red Sea thatpasses by um the coast of Yemen.
(00:47):
So as we know, the the Houthishad no difficulty attacking
ships and basically divertingthe vast majority of container
traffic since 2023, even fromthat higher position.
But this certainly means kind ofuh a solidification of their
control and kind of anescalation of the threat.
Um this advance probably has abigger impact on uh or or threat
(01:11):
to um crude oil flows, becausethere are a lot of oil tankers
that are going through there,especially from Saudi Arabia.
Um, and there's been uh anattack by another uh Iranian
proxy group probably um on aSaudi pipeline also this week.
So these are kind of increasingthe threats to global uh energy
uh flows, and I think that's thepoint.
(01:31):
Um some experts watching crudeoil prices and looking at bunker
prices as well see that they'vegone back to kind of highs we
haven't seen since May.
Um prices were already elevatedabove pre-war levels, but this
is kind of a back to higherlevel than we saw before.
Um and so it seems that youknow, with the prospect that the
Hormuz is not opening anytimesoon, the strategies that we've
(01:53):
been relying on, which a lot ofit has been drawing from uh
reserves, especially for China,uh, it seems like those are kind
of wearing thin and they couldlead to an actual fuel crisis,
which basically we've had highfuel uh costs, but not uh a real
fuel crisis or real shortagesjust yet.
And so that's kind of the thethreat and the and the
significance.
And that has significance forcontainer shipping in terms of
(02:14):
uh price, uh you know, in termsof uh fuel costs and therefore
uh freight rates, but um youknow you would think that this
would have an impact on stepsthat carriers have taken back
towards the Red Sea becausewe've seen increases um
basically since June when thereare increased threats.
What we've seen before is thatcarriers that started going back
(02:35):
to the Red Sea turned around,and that's not what we're seeing
now, really surprisingly.
Um so, according to uh estimatesmade by sea intelligence, more
than a quarter of Asia Europecapacity will go through the Red
Sea on September, um, much moreon Asia Mediterranean than Asia
North Europe.
For Asia Mediterranean is alsomuch more on the backhaul, about
50% compared to the uh headhall, which they estimate at
(02:56):
35%.
North Europe is something onlylike 6% of headhall and 30% of
backhaul.
But this is much more than we'veseen, you know, at any point
since late 2023.
Um and I think the calculus hereis that there are much higher
fuel costs and also reallysignificant congestion, both in
North Europe from just kind ofpersistent congestion, and we
also have low water levels inthe Rhine, and now the real
(03:18):
congestion is also in the FarEast, where we've had just
typhoon after typhoon, that hasreally caused significant
congestion that continues.
It might continue until evenafter uh Golden Week and into
October.
SPEAKER_00 (03:28):
Okay, is the increase in the Red Sea transits
also impacting container rates?
SPEAKER_01 (03:34):
So, as we said, kind of especially for Asia
Mediterranean, there's been apretty good chunk that's now
going moving much faster.
And so that is um may be havingan impact on container rates.
So if we look at rates, AsiaNorth Europe prices fell about
3% last week to 4,300.
Asia-Mediterranean rates dropped12% to 4,200, but if we look at
(03:54):
rates so far this week, both arearound$3,800 per container,
which is still city significantpretty significant, but well
down from where it was before.
But there's a sharper drop forAsia and Mediterranean prices.
So those are down$3,000 fromtheir July peak, whereas uh
North Europe rates are down$2,000 and also a much higher
percentage, like more than 50%for Asian Mediterranean.
And so that might reflect thehigher rate of Red Sea transits
(04:17):
for Asia and Mediterranean andthat kind of uh freeing up more
capacity and speeding thingsalong compared to what we're
seeing for North Europe.
We should keep in mind thoughthat even with you know, rates
are falling mostly because weare post-peak season uh on these
lanes, right?
The peak volumes are behind usand demand is falling, so rates
are falling.
We're saying, you know, fasterfor Asia Med maybe because of
(04:38):
the Red Sea, but for both theselanes, for Asia, North Europe
and for Asian Mediterranean,they're still 20% to 50%,
respectively higher than theywere before peak season demand
started.
So if demand levels are back towhere they were, rates are still
much higher than they werebefore, and that's probably
because of this congestion thatcontinues, again, both in
Europe, but also especially inthe Far East.
SPEAKER_00 (04:59):
Okay, can you share what's been happening on the
Trans-Pacific routes?
SPEAKER_01 (05:03):
Yeah, so kind of a different story here.
As we said before, we had anearly start to peak season
across these lanes.
We started to have an early endto peak season for Asia, Europe,
and Mediterranean.
On Trans-Pacific, we saw uhdemand and rates really just
stay at peak levels since July,and they continue to do so this
week.
Part of what's keeping rates upis probably also this far east
(05:24):
congestion, but we've had kindof you know uh sustained demand
on these lanes.
Now, the National RetailFederation they project that
October arrivals are going to be9% lower than September.
They're measuring arrivals, thatmeans those are bookings that
are being made, you know, havebeen made or are being made just
now.
So that probably means thatwe're either a little bit post
you know peak season um uhbookings um or already or we
(05:47):
will start to come down a littlebit more significantly pretty
soon.
And so um as we approach GoldenWeek, um and so we should
probably start to see rates uhfalling as well.
Uh carriers are blankingsailings already, probably a
sign that some of that demand iseasing, also blanking sailings
over uh uh Golden Week, which istypical.
Um so we'll probably start tosee rates come down, you know,
(06:08):
as we move into October.
But as we said, this congestionissue is going to mean that even
when demand is easing, rates aregoing to stay more elevated than
otherwise they would, just likewe're seeing for the Asia
Europeanes.
SPEAKER_00 (06:20):
Okay, let's move to air cargo for a minute.
Thousands of flights in and outof the UK were disrupted last
week from an air traffic controlsystem outage.
What's the latest there and inair cargo market more generally?
SPEAKER_01 (06:32):
Yeah, so the outage uh was actually only about three
hours long that the system wasactually down, but it disrupted
you know almost 2,000 flights.
Um and that recovery has reallylasted into this week.
So this happens last Tuesday.
Uh now it looks like things arenormalizing, but certainly was a
big disruption.
In terms of the overall market,if we look at our Fredos Air
(06:53):
Index global benchmark, theglobal rate is down 5% from
recent uh uh highs in the lastfew weeks, possibly from
typhoon-related disruptions thatthings are recovering.
And it's also decreased 15% fromlevels or from the high that it
hit um, you know, just as thewar broke out, but it's still
25% higher than it was a yearago, and that's because uh jet
(07:15):
fuel costs remained really highbecause of the closure of the
street of hormouse.
Um, nonetheless, kind of globalvolumes have been strong,
something like four or fivepercent global um volume growth
year to date, according toAyada, which only goes through
through July, we can expect thatas continued.
Nonetheless, you know, some inthe industry aren't expecting a
very strong peak season.
I don't think anyone's sayingthat peak season isn't going to
(07:37):
materialize.
They're not expecting a very umuh impressive peak season in
terms of volumes or impact onrates.
And this is partially duebecause some of the or a good
chunk of the volume strength ofthe growth that we've had this
year has been to AI-relatedhardware.
Right, this big build-out ofdata centers, things that are
going by air, and those are notseasonal goods, right?
(07:57):
Those are coming as fast as theycan and will continue to do so.
And it's also limited to somelanes, particularly Taiwan and
South Korea, as well as someEast Asian countries and mostly
to the US.
On these lanes, though, someforagers are saying that you
know capacity probably will bequite tight over peak season as
well, and might push somevolumes to ocean or some
shippers moving to sea airoptions.
(08:19):
Um, I think that we will see anincrease in volumes and an
increase in rates uh for peakseason across the typical lanes,
and maybe not as strong asusual, just because general
cargo has not been as strong assome of these other sectors.
Um and uh yeah, so I thinkthat's what we'll see.
And just to remember or keep inmind that we're starting from a
very elevated price pointbecause of the war impact.
(08:41):
So if prices increase, they'regonna be climbing from that
already elevated spot.
SPEAKER_00 (08:45):
All right, great.
Thank you, Judy.
That's all we have time fortoday.
If you enjoyed this episode,please hit the subscribe button
and you'll get notified aboutall our future episodes.
Thank you for listening andgoodbye.
Hi there and welcome to today's episode of Container
Victoria.
Your ten minute update on thelatest integrator.
I'm Julia Frowe, as alwaysjoined by Judah Levine of Radio.
Judah, how are you doing?
SPEAKER_01 (00:12):
Good.
How are you?
SPEAKER_00 (00:14):
Yeah, I'm doing okay, thank you.
So let's kick off.
There's new drama in the MiddleEast this time from the Houthis
as they've taken control of aport and island directly on the
Red Seas of Balmandem straight.
What could this mean forcontainer shipping?
SPEAKER_01 (00:27):
So the Houthis basically until now have been in
control of uh elevated ground,maybe a few tens of miles away
from the coast.
Um and now they have seas, kindof these strategic port and on,
which are directly on um thestrait, which is that very
narrow part of the Red Sea thatpasses by um the coast of Yemen.
(00:47):
So as we know, the the Houthishad no difficulty attacking
ships and basically divertingthe vast majority of container
traffic since 2023, even fromthat higher position.
But this certainly means kind ofuh a solidification of their
control and kind of anescalation of the threat.
Um this advance probably has abigger impact on uh or or threat
(01:11):
to um crude oil flows, becausethere are a lot of oil tankers
that are going through there,especially from Saudi Arabia.
Um, and there's been uh anattack by another uh Iranian
proxy group probably um on aSaudi pipeline also this week.
So these are kind of increasingthe threats to global uh energy
uh flows, and I think that's thepoint.
(01:31):
Um some experts watching crudeoil prices and looking at bunker
prices as well see that they'vegone back to kind of highs we
haven't seen since May.
Um prices were already elevatedabove pre-war levels, but this
is kind of a back to higherlevel than we saw before.
Um and so it seems that youknow, with the prospect that the
Hormuz is not opening anytimesoon, the strategies that we've
(01:53):
been relying on, which a lot ofit has been drawing from uh
reserves, especially for China,uh, it seems like those are kind
of wearing thin and they couldlead to an actual fuel crisis,
which basically we've had highfuel uh costs, but not uh a real
fuel crisis or real shortagesjust yet.
And so that's kind of the thethreat and the and the
significance.
And that has significance forcontainer shipping in terms of
(02:14):
uh price, uh you know, in termsof uh fuel costs and therefore
uh freight rates, but um youknow you would think that this
would have an impact on stepsthat carriers have taken back
towards the Red Sea becausewe've seen increases um
basically since June when thereare increased threats.
What we've seen before is thatcarriers that started going back
(02:35):
to the Red Sea turned around,and that's not what we're seeing
now, really surprisingly.
Um so, according to uh estimatesmade by sea intelligence, more
than a quarter of Asia Europecapacity will go through the Red
Sea on September, um, much moreon Asia Mediterranean than Asia
North Europe.
For Asia Mediterranean is alsomuch more on the backhaul, about
50% compared to the uh headhall, which they estimate at
(02:56):
35%.
North Europe is something onlylike 6% of headhall and 30% of
backhaul.
But this is much more than we'veseen, you know, at any point
since late 2023.
Um and I think the calculus hereis that there are much higher
fuel costs and also reallysignificant congestion, both in
North Europe from just kind ofpersistent congestion, and we
also have low water levels inthe Rhine, and now the real
(03:18):
congestion is also in the FarEast, where we've had just
typhoon after typhoon, that hasreally caused significant
congestion that continues.
It might continue until evenafter uh Golden Week and into
October.
SPEAKER_00 (03:28):
Okay, is the increase in the Red Sea transits
also impacting container rates?
SPEAKER_01 (03:34):
So, as we said, kind of especially for Asia
Mediterranean, there's been apretty good chunk that's now
going moving much faster.
And so that is um may be havingan impact on container rates.
So if we look at rates, AsiaNorth Europe prices fell about
3% last week to 4,300.
Asia-Mediterranean rates dropped12% to 4,200, but if we look at
(03:54):
rates so far this week, both arearound$3,800 per container,
which is still city significantpretty significant, but well
down from where it was before.
But there's a sharper drop forAsia and Mediterranean prices.
So those are down$3,000 fromtheir July peak, whereas uh
North Europe rates are down$2,000 and also a much higher
percentage, like more than 50%for Asian Mediterranean.
And so that might reflect thehigher rate of Red Sea transits
(04:17):
for Asia and Mediterranean andthat kind of uh freeing up more
capacity and speeding thingsalong compared to what we're
seeing for North Europe.
We should keep in mind thoughthat even with you know, rates
are falling mostly because weare post-peak season uh on these
lanes, right?
The peak volumes are behind usand demand is falling, so rates
are falling.
We're saying, you know, fasterfor Asia Med maybe because of
(04:38):
the Red Sea, but for both theselanes, for Asia, North Europe
and for Asian Mediterranean,they're still 20% to 50%,
respectively higher than theywere before peak season demand
started.
So if demand levels are back towhere they were, rates are still
much higher than they werebefore, and that's probably
because of this congestion thatcontinues, again, both in
Europe, but also especially inthe Far East.
SPEAKER_00 (04:59):
Okay, can you share what's been happening on the
Trans-Pacific routes?
SPEAKER_01 (05:03):
Yeah, so kind of a different story here.
As we said before, we had anearly start to peak season
across these lanes.
We started to have an early endto peak season for Asia, Europe,
and Mediterranean.
On Trans-Pacific, we saw uhdemand and rates really just
stay at peak levels since July,and they continue to do so this
week.
Part of what's keeping rates upis probably also this far east
(05:24):
congestion, but we've had kindof you know uh sustained demand
on these lanes.
Now, the National RetailFederation they project that
October arrivals are going to be9% lower than September.
They're measuring arrivals, thatmeans those are bookings that
are being made, you know, havebeen made or are being made just
now.
So that probably means thatwe're either a little bit post
you know peak season um uhbookings um or already or we
(05:47):
will start to come down a littlebit more significantly pretty
soon.
And so um as we approach GoldenWeek, um and so we should
probably start to see rates uhfalling as well.
Uh carriers are blankingsailings already, probably a
sign that some of that demand iseasing, also blanking sailings
over uh uh Golden Week, which istypical.
Um so we'll probably start tosee rates come down, you know,
(06:08):
as we move into October.
But as we said, this congestionissue is going to mean that even
when demand is easing, rates aregoing to stay more elevated than
otherwise they would, just likewe're seeing for the Asia
Europeanes.
SPEAKER_00 (06:20):
Okay, let's move to air cargo for a minute.
Thousands of flights in and outof the UK were disrupted last
week from an air traffic controlsystem outage.
What's the latest there and inair cargo market more generally?
SPEAKER_01 (06:32):
Yeah, so the outage uh was actually only about three
hours long that the system wasactually down, but it disrupted
you know almost 2,000 flights.
Um and that recovery has reallylasted into this week.
So this happens last Tuesday.
Uh now it looks like things arenormalizing, but certainly was a
big disruption.
In terms of the overall market,if we look at our Fredos Air
(06:53):
Index global benchmark, theglobal rate is down 5% from
recent uh uh highs in the lastfew weeks, possibly from
typhoon-related disruptions thatthings are recovering.
And it's also decreased 15% fromlevels or from the high that it
hit um, you know, just as thewar broke out, but it's still
25% higher than it was a yearago, and that's because uh jet
(07:15):
fuel costs remained really highbecause of the closure of the
street of hormouse.
Um, nonetheless, kind of globalvolumes have been strong,
something like four or fivepercent global um volume growth
year to date, according toAyada, which only goes through
through July, we can expect thatas continued.
Nonetheless, you know, some inthe industry aren't expecting a
very strong peak season.
I don't think anyone's sayingthat peak season isn't going to
(07:37):
materialize.
They're not expecting a very umuh impressive peak season in
terms of volumes or impact onrates.
And this is partially duebecause some of the or a good
chunk of the volume strength ofthe growth that we've had this
year has been to AI-relatedhardware.
Right, this big build-out ofdata centers, things that are
going by air, and those are notseasonal goods, right?
(07:57):
Those are coming as fast as theycan and will continue to do so.
And it's also limited to somelanes, particularly Taiwan and
South Korea, as well as someEast Asian countries and mostly
to the US.
On these lanes, though, someforagers are saying that you
know capacity probably will bequite tight over peak season as
well, and might push somevolumes to ocean or some
shippers moving to sea airoptions.
(08:19):
Um, I think that we will see anincrease in volumes and an
increase in rates uh for peakseason across the typical lanes,
and maybe not as strong asusual, just because general
cargo has not been as strong assome of these other sectors.
Um and uh yeah, so I thinkthat's what we'll see.
And just to remember or keep inmind that we're starting from a
very elevated price pointbecause of the war impact.
(08:41):
So if prices increase, they'regonna be climbing from that
already elevated spot.
SPEAKER_00 (08:45):
All right, great.
Thank you, Judy.
That's all we have time fortoday.
If you enjoyed this episode,please hit the subscribe button
and you'll get notified aboutall our future episodes.
Thank you for listening andgoodbye.
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