Xeneta: Red Sea capacity returns as China-Middle East container rates hit new records

September 14 ------ Shipping capacity transiting the Red Sea doubled year-on-year in August, while spot rates from China to Jeddah and Khor al Fakkan have surged beyond Covid-19 peaks, according to Xeneta.

The Xeneta Weekly Ocean Container Shipping Market Update highlights divergent impacts from the ongoing disruption to the Red Sea and Strait of Hormuz, with carriers gradually restoring some Red Sea services while container shipping through Hormuz remains effectively closed.

Red Sea capacity returns

According to Peter Sand, Xeneta Chief Analyst, capacity transiting the Bab el-Mandeb strait in August 2026 doubled compared with the same month a year earlier. However, volumes remain at just 23% of the pre-Red Sea crisis level recorded in August 2023. "The return of capacity to the Red Sea is the single biggest variable in the ocean freight market," Sand said.

The latest escalation between Saudi Arabia and the Houthi militia does not appear to have deterred carriers from returning services to the Red Sea, which Sand said is positive for shippers, although changes to networks and services continue to create uncertainty and supply chain risks.

Carriers are taking different approaches to the security risks, with some selectively sending individual services or vessels through the Red Sea. Some carriers are transiting the waterway on one leg of East-West services, primarily into the Mediterranean, while MSC’s return includes a written reversibility clause rather than representing a full network change.

Routing through the Red Sea instead of around the Cape of Good Hope can reduce transit times by 11 days on a typical China-Genoa service. However, shippers need to closely monitor network changes and the possibility of last-minute rerouting to avoid supply chain disruption.

Hormuz disruption pushes rates to new records

The Strait of Hormuz has now been closed to container shipping for more than six months, prompting alternative land-bridge routes into the Middle East, particularly through Jeddah and Khor al Fakkan, to become established.

While these alternatives have provided greater stability, they have also significantly increased costs for shippers. Average spot rates from China to Jeddah have risen 256% since February 28, while rates from China to Khor al Fakkan have increased 479%. The increases have pushed spot rates on both trades above the previous records established during the Covid-19 disruption. “The increased cost is in addition to longer transit times and worse reliability,” Sand said, adding that while the Strait of Hormuz remains effectively closed to container vessels, shippers have limited alternatives for moving cargo into the Gulf region.

Data highlights

Market average spot rates, September 10, 2026

• Far East to US West Coast: USD 7,738 per FEU (40ft container)

• Far East to US East Coast: USD 10,955 per FEU

• Far East to North Europe: USD 4,333 per FEU

• Far East to Mediterranean: USD 4,764 per FEU

• North Europe to US East Coast: USD 2,953 per FEU

• China to Jeddah: USD 10,870 per FEU

China to Khor al Fakkan: USD 10,626 per FEU

Spot rate changes since the end of February, September 10 vs February 28, 2026

• Far East to US West Coast: +312%

• Far East to US East Coast: +313%

• Far East to North Europe: +95%

• Far East to Mediterranean: +43%

• North Europe to US East Coast: +100%

• China to Jeddah: +256%

• China to Khor al Fakkan: +479%

Capacity transiting the Bab el-Mandeb strait, average weekly capacity

• August 2023: 930,679 TEU

• August 2026: 212,636 TEU

Source: safety4sea.com