Renewed conflict in the Middle East has driven a sharp rise in the cost of oil over the last couple of weeks. Sea freight bunker prices have increased significantly, while air freight transit times have also been affected by disruption across the region.
Sea Freight Update
Uncertainty around the Strait of Hormuz has increased again following renewed conflict in the Middle East, with further pressure on global oil markets. Tension has also been seen again in the Red Sea around the Bab al-Mandab Strait, after a period of relative calm in the area over recent months. Oil prices have risen sharply over the last couple of weeks, and this has fed directly into vessel fuel costs.
Bunker prices have increased by around 20% in the last two weeks, meaning fuel-related surcharges and wider shipping costs continue to be affected by volatility in energy markets. With fuel forming a major part of vessel operating costs, this recent increase is expected to remain a key factor in rate and surcharge movements.
Asia-Europe space remains under pressure, with carriers continuing to manage capacity closely across key routes. While demand may ease slightly as we move further into the summer, this does not necessarily mean that space will open up significantly. Carriers are expected to continue using blank sailings, vessel changes and wider network adjustments through August to keep supply and demand closely balanced.
Services into Europe and the UK are continuing to move relatively well, and we are not currently seeing any major congestion challenges across European or UK arrival ports. However, with capacity still being managed tightly and fuel costs moving quickly, the position remains subject to change.
Air Freight Update
Air freight services are continuing to experience pressure on some routes, with reliability still affected by disruption in the Middle East and ongoing seasonal demand.
Transit times with some Middle Eastern carriers remain less reliable than usual. This includes a number of dependable carriers that would normally offer more consistent transit times. Services routed through areas affected by the conflict, combined with mango season demand, continue to create backlog and are leading to longer delays than we would usually expect.
Where delays occur, we will continue to keep customers updated on individual shipments.
If you have any questions or concerns regarding your shipment, please don’t hesitate to contact our Customer Service Team on 01376 533039 or email [email protected].
