Ocean Freight Costs Surge 40% as Houthi Threats Continue in the Red Sea

Freightos shipping index data registered a sharp rise in container shipping rates on major trade routes between Asia and Europe, as costs jumped 40% since the beginning of 2026 compared to the fourth quarter of 2025. This increase adds over $1,200 per standard container on the Asia-Europe route passing through the Suez Canal.

Ongoing Houthi attacks on commercial vessels in the Red Sea forced major shipping companies such as Maersk, Hapag-Lloyd, and COSCO Shipping to reroute around the Cape of Good Hope, adding approximately 10 additional days to a container's transit time. Maersk reported that it continues to avoid Red Sea transit on 85% of its Europe-Asia voyages.

These developments reflected positively on global shipping company stocks, with Maersk shares registering a 12% gain over the past six weeks. Conversely, European retailers are suffering from margin pressures, with reports indicating that some have contracted air freight to compensate for delays, despite it costing nearly 5 times more.

Barclays analysts point out that if this situation persists through the end of the year, it could add 0.4 percentage points to Eurozone inflation rates, complicating the European Central Bank's task in managing monetary policy. The report added that the redrawing of international maritime shipping routes is transforming from an emergency crisis into a new structural reality, unless security threats in the Red Sea come to a permanent end.

What Do These Terms Mean?

Twenty-Foot Equivalent Unit (TEU): An international standard unit for sea containers, representing a 20-foot long container, used as a benchmark for measuring vessel capacity and shipping rates worldwide.

Cape of Good Hope Route: An alternative maritime route navigating around the southern tip of the African continent instead of passing through the Suez Canal; it is approximately 3,000 nautical miles longer, taking more time and incurring higher costs.

Freightos Index: A global benchmark tracking container shipping rates across major maritime trade routes, considered one of the most critical indices monitored by import/export firms and marine insurers.