The Early Peak Season: Surging Demand and Capacity Constraints

The early peak season on Asia-Europe trades has led to a significant surge in demand, tightening capacity and driving up shipping rates. Shippers are struggling to secure their weekly allocations as carriers become more creative in their space management strategies. The situation is exacerbated by port congestion in Asia and longer transit times around southern Africa.

Early Peak Season Dynamics

The early arrival of the peak shipping season has caught many by surprise. Shippers are scrambling to secure vessel slots due to the low availability of ships and containers. Wan Hai Lines GM Tommy Hsieh highlighted during a recent press conference that the ongoing Red Sea crisis and navigation challenges in the Suez Canal have extended sailing distances, significantly reducing idle capacity to just 190,000 TEU, or 0.7% of the total fleet. This situation has reignited what Hsieh termed as a "war for containers," reminiscent of the equipment shortages seen during the COVID-19 pandemic. Major container manufacturers are now fully booked until November, pushing up freight levels as we head into Q3.

Impact on Freight Rates and Capacity

With demand outpacing supply, freight rates across major routes are on the rise. The early peak season has intensified competition for containers, making it increasingly difficult for shippers to find available slots. This scenario is particularly challenging for Asia-South America services, which