For this week’s Transpacific ocean freight market update, we attended the TPM conference –– read on for our key takeaways.
Technology & AI Take Center Stage
One of the biggest themes coming out of this year’s TPM conference is how quickly the logistics industry is evolving. Since the pandemic, there’s been a major shift toward digital tools—especially customer self-service platforms and real-time shipment visibility. Looking ahead, technology investment isn’t just a nice-to-have—it’s becoming the main way forwarders stay competitive. In 2026, AI is expected to play a major role in improving efficiency and decision-making. For larger NVOs, competition is no longer just about rates; it’s increasingly about system capabilities and overall tech strength.
2026 Market Outlook
The year ahead remains uncertain. Ongoing tariff changes and geopolitical instability continue to weigh on the market. With IEEPA tariffs on Chinese goods now lifted, we could see some rebound in China volumes. At the same time, Southeast Asia continues to grow as a sourcing hub, while India is gaining momentum following reduced U.S. tariffs.
That said, the current conflict in the Middle East is adding a new layer of disruption. We’re already seeing the impact—tightening vessel capacity, port congestion, and rising fuel costs, all of which are pushing rates up in the short term.
Despite this upheaval, the broader outlook remains relatively flat. Inflation and slower economic growth are expected to keep demand in check. If geopolitical tensions ease, spot rates could fall back again. Some smaller carriers have already begun exiting the transpacific trade, while others may scale back service, leaving larger alliances better positioned to support price-sensitive cargo.
Contract Negotiations Delayed
Ocean carriers have hit a pause on 2026 contract discussions due to the situation in the Middle East. Previous rate offers have been pulled, and negotiations with direct importers are still ongoing. However, just today, import giant Walmart, has concluded some of their service contracts.
NVO contract talks are now expected to begin later than usual, with initial rate guidance likely toward the end of March and first-round offers potentially arriving in early April.
DDP Growth & E-commerce Scrutiny
There’s been a noticeable shift from FOB to DDP INCO terms as shippers look for ways to manage tariff exposure. However, much of this activity is tied to e-commerce channels using aggressive—and sometimes questionable—practices to reduce duty payments.
Regulators are starting to respond. U.S. surety providers are tightening bond requirements, and authorities are placing more scrutiny on importer-of-record qualifications. These changes could reshape the e-commerce landscape and potentially push some volume back toward more traditional shipping terms.
India–U.S. Ocean Market Update
Space is beginning to tighten as carriers reroute vessels to avoid high-risk areas like the Red Sea. This is causing delays, equipment imbalances, and increased pressure on capacity—especially for East Coast routings.
While equipment levels at major Indian ports remain stable for now, early signs of shortages are emerging due to disrupted container flows. Kolkata continues to face congestion challenges.
Pricing is moving quickly. After a relatively stable February, rates have surged sharply in March—now running 3 to 5 times higher in some cases. Carriers are implementing general rate increases, war-risk surcharges, emergency fuel charges, and higher insurance costs, with more increases expected in the near term.
Transit times are also extending due to longer routing, adding further strain to supply chain planning.
Middle East Disruption Driving Port Congestion & Rising Costs
Ongoing conflict in the Persian Gulf is starting to ripple across global shipping lanes, with congestion building at key ports outside the region as carriers divert cargo away from risk zones.
When air strikes escalated tensions in late February, several major Gulf ports — including Jebel Ali, Abu Dhabi, Doha, and Kuwait — were temporarily shut down. While some terminals have since reopened, vessel traffic remains light as operators continue to avoid the area.
Cargo Rerouting Creates New Bottlenecks
With ships unable or unwilling to enter the Gulf, carriers are discharging cargo earlier than planned. That’s pushing unexpected volumes into nearby ports like Khor Fakkan, Sohar, Karachi, and key Indian gateways such as Mundra and Nhava Sheva.
The result: growing congestion and longer wait times across these alternative hubs. Some ports are already operating at or near full capacity, with delays stretching several days as vessels queue for berths.
Another wave of cargo is still on the way. Shipments that left Asia before booking suspensions are now being redirected, with some containers heading to transshipment hubs like Singapore, Colombo, and Tanjung Pelepas, while others are moving as close as possible to their original destinations.
The closer cargo gets to the conflict zone, the higher the risk of delays.
Capacity Trapped, Equipment Tightening
At the same time, a significant amount of container capacity remains stuck inside the Persian Gulf. With limited safe passage through the Strait of Hormuz, both vessels and equipment are effectively stranded.
This is starting to create knock-on effects in Asia. The Gulf is typically a net importer, meaning empty containers are usually repositioned back to Asia for export use. With that cycle disrupted, early signs point to tightening equipment availability across key origin markets.
Rates Climb as Disruption Spreads
Unsurprisingly, rates are reacting. Since the end of February, pricing from Asia into India and the East Mediterranean has climbed sharply, with additional surcharges being applied across affected trade lanes.
Carriers are also introducing emergency pricing and advising customers to expect alternative routings, potential storage in transit, and longer overall transit times.
Bigger Picture: Supply Chain Impact Growing
Beyond shipping, the situation is adding volatility to energy markets and increasing pressure on global supply chains. The Strait of Hormuz remains one of the world’s most critical trade corridors, particularly for oil and LNG.
While supply chains today are more resilient than in the past, continued disruption in this region is expected to drive higher costs, create imbalances, and add complexity to global logistics planning in the weeks ahead.
Airfreight Market Snapshot (China & Southeast Asia)
China–U.S. Air cargo demand continues to climb, with volumes up week-over-week and showing strong year-over-year growth. Major U.S. gateways like JFK, LAX, and ORD are all seeing increased throughput. Rising fuel costs are also leading to higher surcharges, with adjustments already being announced by some carriers.
Hong Kong & Southeast Asia Capacity remains tight, particularly with Middle East carriers operating at reduced levels. Flight cancellations and backlogs are still impacting the market.
Rates are climbing quickly and are largely being quoted case by case. Fuel surcharges also seeing significant increases, adding to overall costs.
At the same time, strong demand from sectors like electronics, e-commerce, and fashion is continuing to drive growth out of Southeast Asia, keeping pressure on both space and pricing.
Between geopolitical disruptions, shifting trade policies, and rising costs, the market is entering a highly volatile period. Short-term rate increases and capacity constraints are likely, but longer-term stability will depend heavily on how these global events unfold.
As the global logistics landscape continues to shift, agility, visibility, and informed decision-making will be critical to navigating the months ahead. From accelerating technology adoption to managing geopolitical risk and volatile pricing, shippers and forwarders alike will need to stay proactive and flexible. LogiWorld remains committed to monitoring these developments closely and supporting our customers with timely insights, reliable solutions, and strategic guidance as conditions evolve.
Contact us with any questions or to discuss how these trends may impact your supply chain.
