Episode #32: The Golden Week Race and the Middle East Air Squeeze

Welcome back to Container Bytes! I’m Julia Frohwein, joined as always by our resident freight expert Judah Levine, ready to break down another high-stakes week in global logistics. 📍 The Strait of Hormuz remains tenser than ever, with a planned US retaliatory strike temporarily pushed off by President Trump while negotiations continue in the shadow of a crumbling ceasefire.

In this episode, we tackle the massive structural shift impacting Peak Season 2026. Because of ongoing Red Sea diversions, transit lead times are longer than ever. Shippers are realizing they have to move their peak season ocean cargo now—well ahead of China's Golden Week in October—or risk their goods arriving too late for winter shelves. We look at the June GRI attempts targeting an extra $2,000 per container.

Over on the air freight side, the panicky global rate spike has stabilized, but a reverse flow is catching shippers off guard: Middle East air lanes are seeing a massive demand comeback, sending rates from Southeast Asia to the Middle East climbing to a new high of $4.75/kg.

Finally, we track the countdown to Europe's new low-value e-commerce import fees coming this July and what the legacy of the US de minimis clampdown tells us about what's next.

Chapters: 

• 00:00:00 — Hormuz Standbox: Pushed-off attacks and the baseline reality. 
• 00:01:30 — The Golden Week Countdown: Why peak season is starting early for Asia-Europe. 
• 00:03:00 — Transpacific Check-In: $1,000 premiums and June GRI expectations. 
• 00:05:00 — Air Freight Stabilization: Plateauing global indexes vs. high fuel baselines. 
• 00:06:15 — The Middle East Squeeze: Why regional air cargo rates are skyrocketing. 
• 00:06:45 — The July Tariff Clock: Europe's €2 e-commerce fee and the de minimis blueprint.

This podcast is a little experiment from Freightos—and may not be around forever—so if you dig quick bites of freight wisdom, let us know. 

For more detailed weekly freight updates delivered straight to your inbox, check out our weekly freight email. Want the freshest freight data on demand? Hit up terminal.freightos.com.

Transcript

SPEAKER_01 0:00

Hi, and welcome to today's episode of Container Bites. I am Julia Frowine here, as always, with our resident freight expert Judah Levine, ready to kick off another short and sweet session on the latest end freight. Judah, how are you today?

SPEAKER_00 0:12

Good. I'm ready.

SPEAKER_01 0:15

All right. So even though there may be even more tension in the strait of Homelow this week, more than last even, uh, for the container market, as long as the strait is closed, it's been pretty much more of the same. So we're getting close to peak season. So will that change things for Ocean Freight if the strait remains closed?

SPEAKER_00 0:30

Yeah. So as you said, first of all, there's been high levels of tension in the strait. The US was reportedly put pre planning an attack for earlier this week that was then uh pushed off, according to President Trump, and that's still kind of on the table as negotiations um continue. But obviously it's it's complicated. But yeah, basically, as long as the strait is closed, it means more of the same disruptions for containers trying to get in and out of the Gulf, higher costs and fuel costs because of um the higher costs of energy overall. The question is what happens when peak season starts, is there a difference? So for starting with Asia, Europe, container rates really have kind of been level throughout the period since the war started. Um, but those additional fuel costs have probably kept rates uh higher than they otherwise would have been, in other words, prevented them from falling during these low demand periods of March and April. The continued closure probably means that when we have seasonal events, we'll start to see demand-driven changes in rates from an elevated fuel uh adjusted uh baseline. Uh, and of course, there's some capacity management thrown in also in terms of blank sailing. So last week to North Europe, Asia-North Europe prices were at $2,800 per uh 40-foot container to the Mediterranean, $3,600. So these are already, you know, fairly elevated compared to what we'd expect for a slow season. The question is, is peak season starting? So peak season demand for Asia Europe lanes under like normal circumstances, if there is such a thing anymore, um, would usually start around as late as July and then run through mid-October. But we have Red Sea diversions. And so since carriers have been diverting away from the Red Sea, it really means that there's longer lead time for shippers importers on these lanes. Uh, and it means they really have to move all their peak season goods before Golden Week, before the first week in October, because if they don't, then there's really not enough time after Golden Week with those longer lead times to receive goods on time. So in the first year of the Red Sea crisis 2024, we saw peak season uh pick up already in May. Last year it started only in June, probably because it turned out, you know, May wasn't as necessary as it seemed, while there was a lot of uncertainty. So it is certainly possible that we're starting to see peak season uh pick up now. In uh last year, the peak season increase was about $1,200 per container. And there are um some carriers or other reports saying they are seeing an uptick in demand on these routes already. We've also seen uh daily rates start to increase for this week and on probably mid-month GRI attempts. So we may indeed start to be seeing peak season pickup on these lanes. There have been GRIs for June announced about an additional $2,000 per container. We'll remain to be seen whether there's enough demand to kind of justify that rate increase, given that maybe fuel costs are already baked in.

SPEAKER_01 3:18

Okay. And what about the Trans-Pacific? Is there an early start there as well, do you think?

SPEAKER_00 3:22

Um so I think in general we'll see the same thing increases in rates based on seasonal demand from wherever they are now, which is taking account of the fuel um increases. So Trans-Pacific rates have climbed about $1,000 per container since the start of the war for the West Coast, a little bit more to the East Coast. That $2,800 to the West Coast right now, $4,300 uh to the East Coast. The question is peak season starting here, probably not just yet. We are seeing daily rates start to increase this week as well. And again, those are probably mid-month GRI attempts. The question is whether they'll be uh successful. So for the Trans-Pacific, you know, you don't have to see issue in terms of creating longer lead times. And peak season can start as early as June. Sometimes it kicks in uh closer to July. Um, agenda would last till September or or even October. We can't really compare it to the last couple of years because of uh the trade war last year and the year before there were uh labor tensions, which may have meant some early start. But it's certainly possible that peak season demand will start soon, but maybe it hasn't started just yet. So the National Retail Federation uh projects that July is going to be the start of peak season. That means arrivals. So that would mean that orders would start towards uh June or mid-June. So it's possible that we're seeing some start now, but or it's likely that we'll at least see it in the next few weeks. And so that will kind of determine what rates do right now. And again, like it seems that the the additional fuel costs are already being passed along. So if we see rates continue to increase now, it may mean there's a start of of some increase in demand in the kind of earliest start of peak season. Um, but of course, carriers are also reducing capacity to try and get rates up.

SPEAKER_01 5:01

Okay. So moving on to air cargo, is it more of the same for air cargo and air rates as well?

SPEAKER_00 5:06

Um, so kind of yes and no. So, yes, in terms of what we've seen since the start of the war, was a sharp increase in rates on most lanes. Um, and that was due to two factors. One is the much higher cost of jet fuel. And the second is that there were big decreases in capacity because golf carriers are major uh providers of air cargo capacity, and they were grounded or you know, greatly reduced for a stretch of time. That capacity has continued to recover, uh, and jet fuel prices have come down a little bit, although they remain very elevated compared to normal. So, in general, we've seen the stabilization. So, kind of most rates are are past their peak and either continuing to ease a little bit or have plateaued. So, if we look at our Freydos Air Index, the data there shows that rates from China, South Asia, and Southeast Asia to Europe, they still remain about 50% higher than they were before the war. But in these lanes, they've mostly plateaued or are just past their peak. But we are seeing one uh difference is that the Middle East carriers, as we said, are recovering and restoring uh flights. So that's an increase of capacity there. But it seems that a lot of those volumes that had shifted from, you know, that would normally go through the Middle East, like from South Asia, Southeast Asia on their way to Europe, or even from Africa to Europe that would normally go through the Middle East had shifted elsewhere. And it seems that now they're shifting back, and we're seeing kind of a sharper increase in rates or more upper pressure on rates into the Middle East than on some of the other lanes. So for example, Southeast Asia Timid East rates um reach a new high of $4.75 per kilo last week, and they're continuing to climb this week. South Asia and Middle East prices are above $4 per kilo, and that's compared to about $2.70 a month ago. So some differences there as well.

SPEAKER_01 6:51

And the EU is set to start charging two euros per low-value import, the you know, the types of shipments that until then would enter duty free under de minimis. So are we expecting big changes in air cargo due to this change?

SPEAKER_00 7:04

Right. So that's set for uh July. And again, it's kind of targeting these e-commerce, you know, low-value packages that are now coming in very large volumes from mostly from China into Europe, um, the big market in the United States as well. Um, so this fee is set to roll out in July and is set to account for the handling and also hopefully uh some perspectives try and deter some of those uh volumes because of the competition with domestic uh retailers and things like that. France introduced that fee in March due to kind of domestic concerns and and pressure. And there's been a really sharp drop in um low-value parcels entering France. Um, but I think it's because it's uneven, right? The fee is in France, but not in Germany, so you'll see probably a big uh increase in volumes to the surrounding areas and then and then entering by road. Once it's rolled out in its entirety, it'll be a question of what kind of impact it will have. Um, we could compare this to the cancellation of diminish in the US, but I think the cancellation in the US is kind of more expensive because um it wasn't kind of a set fee per package, but now they are um liable for duties instead of coming in um tariff-free. Um, so there's probably a bigger impact there. We have seen a significant drop in e-commerce um parcels coming in by air cargo to the US. Um, there's still significant volumes, but there had been you know much higher and it had been continuing to grow. And I think it's kind of uh leveled off at a lower level. So we'll probably still see uh e-commerce volumes coming by air to the uh to the EU, but probably in you know, not as strong and not as strong growth as we saw previously as these uh platforms are kind of adapting to um the new regulatory scheme.

SPEAKER_01 8:50

All right, so uh watch this space, we'll see what happens. All right, that's all we have time for today. Thank you so much, Judah. And if you enjoyed the session, please hit the subscribe button to get notified about all our future episodes. Thank you for joining and goodbye.