Dual chokepoint closure drives container freight sharply higher
With Hormuz restricted and the Red Sea still avoided, carriers reroute via the Cape, lifting spot rates 29-129% on key lanes
Summary
The effective closure of the Strait of Hormuz from late February, layered atop continued Red Sea avoidance, produced the most disruptive container environment since the pandemic. Far East-US West Coast spot rates rose ~29% by early April; Shanghai-LA and Shanghai-NY jumped 59-129%, and Shanghai-Jebel Ali roughly quadrupled above $8,000 per container. Maersk and Hapag-Lloyd reported hundreds of millions in extra monthly fuel costs and imposed emergency surcharges. Carriers had begun returning to Suez in late January, but Gulf instability reversed the gains; transits fell again after Iran's 22 June re-closure announcement.
Why it matters
Cape rerouting adds 3,500-4,000 nautical miles and 10-14 days per voyage, absorbing fleet capacity and forcing surcharges that ripple into goods prices — the second-order channel of the largest oil supply disruption on record.