Asia Europe Trade Enters Downward Rate Cycle Amid Dual Chokepoint Crisis

The Asia-Europe trade has entered a downward rate cycle during the first half of August, with spot rates declining moderately from their late-July peaks as carriers adjust pricing strategies in response to softer demand acceptance. While the initial rate correction has been gradual, the market is recalibrating from the elevated levels reached during June and July. At the same time, the Middle East maritime security environment has deteriorated sharply, with both the Strait of Hormuz and Bab el-Mandeb now facing active blockade threats, creating a dual chokepoint crisis that has pushed energy commodity prices to elevated levels and raised significant concerns about global energy and shipping supply chain continuity.

To help you better understand the current market environment and support your sales activities at origin, please find below our latest market observations and outlook for the first half of August.

Rate Direction and Carrier Pricing Strategy

• Spot rates have entered a downward cycle following the peaks recorded during late July, with the market correcting previous pessimistic expectations. The decline has been moderate in its initial phase, reflecting carriers’ efforts to maintain pricing discipline while adjusting to softer cargo acceptance levels.
• Week 32 opening rates have adjusted lower from the previous week, with index contract rates declining in parallel and alliance pricing behavior remaining relatively coordinated.
• Alliance carriers are maintaining rates closer to late-July levels in their preliminary August pricing, with index contracts positioned lower and carriers demonstrating coordinated pricing behavior.
• Premier Alliance carriers are offering voyage-specific and port-specific promotional rates, with volume-based special rates available for larger commitments and dedicated pricing for tire cargo reflecting ongoing vessel utilization optimization.
• MSC has maintained its early August rate structure unchanged from late July across its tiered product offerings. The carrier’s blended actual booking rate reflects the mix of service tiers and demonstrates continued flexibility in commercial support depending on cargo characteristics and routing requirements.
• For partners handling larger-volume opportunities or project cargo, we encourage early engagement with our pricing team. Market conditions remain negotiable across multiple carrier options, and tailored routing solutions can be developed based on transit requirements, equipment availability and destination flexibility.

Capacity Outlook and Service Deployment

• July weekly average capacity recorded 31,600 TEU, down slightly from June levels but maintaining a substantial year-on-year increase. August weekly average capacity is projected at 31,900 TEU, representing a modest month-on-month improvement and reflecting carriers’ confidence in maintaining supply throughout the late summer period.
• Week 31 recorded three blank sailings concentrated within the GEMINI and Ocean Alliance networks. GEMINI’s AE3 service reduced East China port calls during this week, with the deployed vessel only calling Yantian rather than the full regional rotation. Ocean Alliance’s LL1 and CEM services each recorded one cancellation during the same period.
• August blank sailing activity remains limited, with only two periodic cancellations currently scheduled. CMA CGM’s FAL1 service will implement a periodic blank sailing during Week 34, while COSCO’s AEU7 service is scheduled for a periodic cancellation during Week 35. One vessel deployment remains to be named for Week 35, though this is not expected to materially affect overall capacity availability.
• Blank sailing frequency has declined and vessel deployment patterns have stabilized across the major alliances. Carriers continue balancing capacity discipline with service consistency, supporting more predictable booking planning for time-sensitive cargo.
• Overall network capacity remains healthy entering the second half of August, with carriers maintaining adequate supply to meet seasonal demand while avoiding the aggressive capacity withdrawals that characterized earlier market cycles.

Geopolitical Risk and Maritime Security Developments

• The Middle East maritime security environment has deteriorated significantly during July, creating a dual chokepoint crisis affecting both the Strait of Hormuz and Bab el-Mandeb. The previous US-Iran ceasefire understanding has collapsed entirely, with the United States resuming maritime blockade operations against Iranian ports from mid-July. Commercial traffic through the Strait of Hormuz has declined sharply as vessels face heightened attack risk, with many ships forced to disable AIS signals for stealth navigation.
• Houthi forces have opened a second front by declaring a maritime blockade of Saudi Arabia in late July, threatening all vessels entering or exiting Saudi ports as direct support for the US blockade of Iran. Two Saudi oil tankers were attacked and set on fire in the Red Sea during the third week of July, directly dragging Bab el-Mandeb into a high-risk combat zone and threatening Saudi Arabia’s alternative oil export route through Yanbu port that was intended to bypass the Strait of Hormuz.
• This dual chokepoint crisis has pushed energy commodity prices to elevated levels and raised acute concerns about global energy supply chain continuity. The escalation affects not only Middle East crude exports but also broader shipping networks, as carriers reassess routing options and operational risk across multiple trade lanes.
• Most Asia-Europe liner services continue routing via the Cape of Good Hope, avoiding both the Red Sea and Suez Canal due to ongoing security concerns. While this routing adds transit time and operating costs, it remains the preferred option given the current threat environment across both Middle Eastern chokepoints.
• We recommend maintaining routing flexibility and early communication with our operations team for shipments with tight delivery windows. Carriers remain cautious about any large-scale return to Suez Canal routing, and the geopolitical situation continues to evolve rapidly, requiring close monitoring and adaptive planning.

RS Logistics will continue monitoring carrier pricing strategies, capacity deployment adjustments, blank sailing developments and the evolving Middle East maritime security situation closely. Our teams across China and Southeast Asia remain available to support booking planning, routing evaluation and space coordination for upcoming shipments. We will continue sharing timely updates as market conditions develop throughout August.

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