Global freight markets strained by fuel costs and capacity crunch

Global freight markets are facing rising costs, tightening capacity and growing uncertainty in May 2026, as geopolitical tensions, fuel volatility and shifting demand patterns impact both air and ocean transport, according to Dimerco’s latest Asia Pacific Freight Report.

Ongoing tensions in the Middle East, particularly around the Persian Gulf, are pushing up fuel costs and disrupting supply chains. Congestion at key transhipment hubs across Asia and uncertainty around the Strait of Hormuz are adding further pressure, forcing carriers to adjust rates and service networks.

In the ocean freight market, carriers are actively increasing spot rates on more active trade lanes, supported by higher fuel costs and the introduction of surcharges such as Emergency Bunker Surcharges. However, on routes where demand remains weak, rate increases continue to face downward pressure.

“The Persian Gulf situation is something we’re watching closely. Rising fuel costs at key bunker hubs, and the risk of shortages if conditions don’t improve, are already starting to shape how carriers adjust their rates and service networks moving forward,” said Ted Chen, Director – Ocean Freight, Global Sales and Marketing, Dimerco Express Group.

Congestion across Asian hubs and frontloading of shipments ahead of expected surcharges and seasonal demand are tightening capacity on key routes. While some lanes are seeing stable or balanced conditions, others are experiencing delays and increasing cost pressure due to fuel volatility and operational disruptions.

Across regions, the ocean market presents a mixed picture. In Northeast Asia, demand is gradually recovering with stable rates, although space remains constrained on major routes. In Europe, the market remains volatile, with softening demand offset by rising fuel surcharges, keeping overall costs elevated. In North America, conditions are largely stable with balanced capacity, though some lanes are tightening slightly.

At a regional level, congestion, blank sailings and schedule changes are continuing to affect reliability. Southeast Asia is seeing increasing surcharges and delays, while markets such as Thailand and India are experiencing tighter space and the need for advance booking to maintain schedules.

Alongside ocean freight, air cargo markets are also under pressure. Fuel constraints linked to Middle East tensions are reducing airline capacity, particularly on Asia–Europe routes, while strong demand from sectors such as electronics, semiconductors and AI-related shipments is keeping rates elevated.

“Demand for traditional commodities is still relatively stable, but cost pressure is building across the board. With fuel surcharges rising and capacity tightening, shippers are having to plan earlier and manage costs much more carefully than before,” said Kathy Liu, VP, Global Sales and Marketing, Dimerco Express Group.

Air freight capacity remains tight across major regions. Northeast Asia continues to see strong demand keeping rates firm, while Southeast Asia is facing higher surcharges and limited space. In Europe, airspace restrictions are increasing costs and tightening capacity, and in North America, strong Asia-bound demand is creating backlogs on key routes.

In China, both air and ocean markets are being affected by capacity constraints, payload restrictions and operational disruptions such as flight cancellations and blank sailings. These factors are keeping supply tight even as demand fluctuates across different routes.

Amid these challenges, rail is emerging as an alternative transport mode. The China–Europe freight train is seeing significant rate increases, with prices rising by $600 to $800 or more in May. Shippers are increasingly turning to rail as a middle option between expensive air freight and slower, less reliable ocean services.

The cargo mix on rail routes is also expanding, with continued demand for heavy equipment and mechanical components, alongside growing volumes of auto parts and consumer goods as supply chains adjust to ongoing disruptions.

Overall, the global freight market is being shaped by a combination of geopolitical risks, fuel cost volatility and shifting trade flows. These factors are driving higher costs, tighter capacity and continued uncertainty across air, ocean and rail transport modes.