January offered carriers a relatively solid start to the year. According to the Q1 market analysis cited by Container News, the quarter began on a positive note, supported by constrained capacity and strong fleet utilization. This is important because it shows that the market was not weak from the outset – it deteriorated over the quarter.
The situation eased in February, when the usual slowdown of the Chinese New Year reduced industrial activity and freight dynamics. This seasonal trough alone would not have been remarkable. What changed the tone was what followed. In March, the market was fragmented by tensions in the Middle East, maritime disruptions, and rising energy costs, darkening short and medium-term prospects.
At the same time, the fleet continued to grow. Data from Alphaliner reported by Safety4Sea shows that the “fully cellular” container ship fleet exceeded 6,700 vessels by early April, while total capacity reached 33.6 million TEUs. The Asia-Europe weekly capacity also set a new record in March. Thus, even though disruptions tightened effective capacity in the short term, the underlying supply continued to increase.
This is what made the quarter so volatile. The market was pulled in two directions: disruptions maintained tighter conditions than would otherwise have been there, while fleet growth continued to build underlying pressure. This is a much more revealing story than just saying Q1 was “dynamic.”
The disruption at Hormuz added an additional layer of tension. In its March market outlook, BIMCO indicated that attacks against Iran from February 28 effectively disrupted transits through the Strait of Hormuz, leaving about 130 container ships stranded in the Gulf and affecting about 5% of global ship demand. In other words, it was not just background noise – it directly disrupted vessel deployments.
Despite this, freight rates did not collapse. Drewry’s World Container Index remained unchanged at $2,287 per 40-foot container on April 2, with Asia-Europe rates remaining largely stable. This suggests that carriers were still able to manage capacity strictly enough to avoid a more widespread rate decline, despite market turbulence.
But the situation deteriorated in terms of costs. Drewry reported that the availability of bunker fuel was tightened due to disruptions around the Strait of Hormuz, leading carriers to respond with slow steaming, alternative bunkering plans, and emergency surcharges on bunkers. So, even though rates did not collapse, the operating environment became more costly and challenging to manage.
Container News also noted that shipowners continued to order vessels despite the volatility, with a preference for dual-fuel and LNG-compatible ships.
