Did You Know That…

 

…Shipping is firing on all cylinders as rate strength spreads.

• Global container freight indexes and transpacific indexes continue to rise, hitting fresh multiyear highs this week

• VLCC rates continue to spike, reaching their highest point on Friday since the beginning of the Hormuz crisis

• VLGC spot rates are double where they were a year ago; in dry bulk, YTD averages for capesizes and panamaxes are up over 60% vs the same period last year

• Rising restrictions at the Panama Canal should support both VLGC and panamax bulker spot rates due to higher tonne-miles.

The traditional shipping business formula — more disruptions equal higher profits — is paying off in epic fashion in 2026. Bad news for the Panama Canal should add to the good news for rates.

…Iran blacklists Western-linked ships as US launches ‘Economic D-Day’ sanctions offensive.

• Iran blacklists 45 ships and warns of fines, detention or confiscation over alleged Hormuz transit breaches

• US prepares unprecedented sanctions offensive against Tehran, prompting Iranian threats to Middle East Gulf oil exports

• Shipowners face growing compliance risks as Iran targets vessels involved in ship-to-ship transfer operations.

Iran threatened to block oil exports through Hormuz if the US sanctions campaign intensifies, warning that supporting countries would be treated as parties to an act of war.

…Our friend Steven Yuan from FS China sent the weekly market-report on China to Europe trade:

Executive Summary
Freight volumes on the European trade lane remain subdued. However, contrary to earlier expectations of a rapid rate correction, European spot rates have not declined sharply due to persistent port congestion in East China resulting from back‑to‑back severe typhoons. Outside the European trade, most other routes—particularly the South American lane—are experiencing rising rates and acute capacity tightness, driven by the combined effect of typhoon disruptions and the seasonal Q3 volume surge.

 

Current Port Situation – Shanghai
Although Typhoon "Dolphin" passed several days ago, the operational backlog at the Port of Shanghai shows no meaningful improvement. Industry expectations of a swift return to normal schedules and terminal efficiency have not materialized. In practice, vessels continue to face prolonged anchorage waiting, berth unavailability, and severe cargo handling delays. Major carriers have issued consecutive service adjustment advisories, with port omissions, void sailings, and substantial schedule slippage now routine. All containers originally booked for shipment from Shanghai in late August are subject to a high probability of delay.

 

Key Monitoring Data (as of 21 August)

• Average vessel waiting time at Shanghai Port: 4.42 days – classified as "Severely Disrupted" on the industry risk scale.

• Total affected container capacity in the Northeast Asia region: over 2.4 million TEUs, with a significant volume of laden and empty containers stranded at terminals.

 

Root Causes of Persistent Congestion

1. Consecutive Typhoon Strikes – No Operational Buffer
   The backlog generated by the first typhoon had not been cleared before the second storm forced another full port closure and work stoppage. With the two events occurring within a short interval, terminal yards, quayside operations, and gate processes were pushed beyond their maximum handling capacity.

2. Peak‑Season Demand Surge (Q3)
   The congestion coincides with the traditional shipping peak season, during which manufacturers accelerate production and shipment execution. The resulting influx of laden containers and truck traffic has overwhelmed terminal reception and storage capacities, further exacerbating the bottleneck.

3. Reactive Vessel Adjustments by Carriers
   Faced with overcrowded berths and extended queues, shipping lines are compelled to implement ad‑hoc measures—including port skips, delayed sailings, and diversion via transshipment hubs—to protect the schedule integrity of their mainline services. These reactive changes, however, introduce additional unpredictability and compound the overall schedule disruption.

 

Outlook
Industry consensus indicates that the current backlog cannot be resolved in the short term, and congestion is expected to persist for several weeks. In response, leading carriers have initiated proactive "self‑rescue" capacity repositioning to mitigate the systemic impact on global trunk route reliability. Stakeholders are strongly advised to factor in extended lead times, closely monitor carrier advisory updates, and consider alternative routing or contingency plans for shipments destined via Shanghai in the coming weeks.

 

…Transpacific liner rates rise as Asia-Europe weakness deepens.

• Shanghai-US west coast rates rose 0.8% to $6,765 per feu, while east coast rates gained 1.4% to $9,700

• North Europe rates fell 3.1% to $4,663 per feu, and Mediterranean prices dropped 6.7% to $5,094

• Eight reporting carriers generated combined second-quarter operating profit of $2.7bn, up 58.2% year on year.

Stronger US-bound cargo growth and tight vessel capacity support Pacific prices, while weak European demand pushes Asia-Europe rates down for a seventh consecutive week.

…MSC returns east-west service to Red Sea. A limited number of MSC’s Asia-Europe services will once again be routed through the region. Carriers have begun returning gradually to the Red Sea during the past few months, including Maersk and Hapag-Lloyd, which have routed some of their Gemini services through the waterway.

 

…Iran-Oman shipping deal offers first diplomatic opening on Hormuz, but strait remains ‘closed’. Further talks planned on a permanent navigation regime. Iran and Oman have agreed on a temporary Hormuz shipping framework, but Tehran says the strait will remain effectively closed pending wider US-Iran diplomatic progress.

…The promise and the pitfalls of China’s new Arctic shipping route. The Northern Sea Route is a pricey and risky alternative to the Suez Canal. FOR A WORLD newly preoccupied with maritime choke points, the voyage of the Dubai Tower offers a flicker of promise. The container ship set off from the Chinese port of Ningbo on August 15th to begin the first regular cargo service between Asia and Europe via the Arctic Ocean. Sea Legend, the vessel’s Chinese owner, says that it will complete the 5,000km journey to Felixstowe, on Britain’s east coast, in about 20 days. That is roughly twice as fast as sailing the usual route via the Suez Canal. Crucially, the “Arctic Express” (as the company calls the service) avoids the risk of being entangled in the Middle East’s military conflicts. The new service via the so-called Northern Sea Route (NSR), which runs through the Bering Strait and over the top of Russia, is an early test of China’s Arctic ambitions. In 2018 the country outlined plans to develop shipping routes, mining, and infrastructure in the Arctic, hoping to take advantage of rapidly receding polar ice. Many of the plans, which are marketed collectively as a “polar silk road”, have met resistance. Seven of the eight countries with Arctic territory are Western democracies. They worry that China is working closely with Russia in the region and that Chinese activities there could be useful for future military purposes, such as operating submarines. Some bridled at China, whose northernmost point is on about the same latitude as Hamburg, declaring itself a “near-Arctic state”.

…China is training up thousands of humanoid robots. But its approach will come with enormous costs. China’s humanoid robots are sprinting ahead of their rivals—literally. On August 17th one of their number, called Superman, clocked up a running speed of 12.66 metres per second, beating the previous record set by Usain Bolt, before crashing into a wall. The triumph only added to the buzz over Unitree, Superman’s maker, which debuted its shares in Shanghai two days later. Their price leapt by 460%. Yet as the ignominious end of Superman’s running feat demonstrates, the technology still has a long way to go. Chinese companies are expected to sell 50,000 humanoids this year, more than triple last year’s figure. They have largely mastered the hardware behind the machines. The software, however, is another matter.

…Klaus-Michael Kühne: The logistics titan who built a global empire and helped shape modern shipping.

• Peers and competitors mourn the loss of one of Europe’s most influential maritime entrepreneurs, with a legacy extending beyond logistics

• Under his leadership, Kuehne+Nagel grew from a family business into a global logistics powerhouse

• Kühne remained a key force in shipping through his investment in Hapag-Lloyd and ties to leading carrier families.

Klaus-Michael Kühne transformed Kuehne+Nagel from a small family freight forwarder into a global logistics leader, while becoming one of shipping’s most influential investors through his long association with Hapag-Lloyd and the wider maritime industry.

…Mark Carney must beware an all-out trade war. His latest tariff threats are proportionate. But the situation could get out of hand. When Donald Trump first ordered tariffs on Canadian goods in February 2025, he said they were needed to force Canada to stop drugs and migrants crossing America’s northern border. He soon dropped that justification only to spew out a litany of other grievances: the trade deficit, national security, Canada’s dairy industry, a Canadian tax, a television advertisement, Canada’s trade with China, wildfire smoke. He repeatedly mused, with a mob boss’s ambiguity, about annexing Canada and making it America’s “cherished” 51st state. The caprice of the world’s most powerful man has now taken Mark Carney, Canada’s prime minister, to the brink of a disastrous trade war. On August 25th Canada announced $20bn-worth of dollar-for-dollar retaliatory tariffs on American goods. The trouble is that America’s economy is 13 times larger than Canada’s and far better equipped to cope. The new tariffs are due to go into effect on September 8th. Mr Carney has until then to find a way to defuse a grave threat to his country’s economy. It will take all his guile. The trigger for the latest hostilities was Mr Carney’s decision on August 21st to walk away from a trade deal that seemed on the verge of being sealed. The prime minister thinks Canada had little choice—though the Americans blame the Canadians. The Americans, he says, added late demands that Canadian truck factories remain subject to high tariffs, and that Canada curb its trade deals with other countries and weaken its protections for French culture and language—a red rag to separatists in Quebec.

…The world is diversifying around China, not away from it.

• China-linked container exports continued to grow in the first half of 2026, defying expectations that tariffs and geopolitical tensions would accelerate a sustained decline in direct trade

• Southeast Asia is becoming an extension of China’s manufacturing base, driving additional container demand

• Rising exports of AI, semiconductor and energy-transition products are adding fresh momentum to trade growth.

Container volumes, carrier deployment, and customs data suggest efforts to diversify supply chains are reshaping Chinese trade rather than reducing it, as exports expand across Asia, the US and a growing range of higher-value industries.

…America’s total national debt rose above $40trn for the first time. The debt has doubled in less than a decade.

…Your editor will be enjoying a three-week summer break, so you’ll have to do without the weekly DYKT newsletter until the end of September. 

Have A Great Weekend !

…This DYKT news bulletin will be published on the website as well, go to www.eaanetwork.com.