asia-europe-trade
Asian Congestion and Rerouting via Suez
The transcontinental container market is undergoing a forced reconfiguration, where port congestion in Asia is becoming the main driver of logistics costs. Data from Drewry’s World Container Index (WCI) highlights a decrease in freight rates on major routes: Shanghai-Genoa falls to $4,368 per 20-foot equivalent unit (TEU) (-10% week-over-week), while Shanghai-Rotterdam stands at $4,092 (-5%). These falling prices hide a critical operational dynamic: carriers are reacting to Asian congestion by diverting capacity via the Suez Canal in order to maintain service frequency.
This reconfiguration shifts the logistical friction from the point of origin to the transit point. The traditional route around Africa is being abandoned in favor of the shorter, but more congested, route through the Mediterranean and the Suez Canal. This results in a saturation of available transit capacity, which creates a domino effect on departure planning and loading times.
The Peak Season Surcharge Mechanism
CMA CGM responded to this structural pressure by introducing a specific Peak Season Surcharge (PSS) for the North Europe-India corridor, effective from September 21, 2026. The rate is set at $100 per TEU and applies to dry containers, oversized goods, reefers, and even the transport of paid empty containers. This decision does not only concern main routes but also includes outports in both Europe and the Indian subcontinent.
The PSS acts as a mechanism for balancing supply and demand during periods of high operational stress. The measure remains in effect until further notice, indicating to customers that available capacity is insufficient to cover the expected volumes for the peak season without an adjustment in rates. This additional cost is directly internalized into the profit and loss statement (P&L) of shipping operations, reducing the operating margins of forwarders and importers.
Ocean Rise Express and Route Saturation
The operational context is further complicated by the launch of the Ocean Rise Express (OCR) service, a new weekly connection between Japan and Southern China directly to Northern Europe. The declared transit times are 38 days from Yokohama to Rotterdam, 41 days to Hamburg, and 45 days to Southampton. The use of the Suez route for this service confirms the carriers’ strategy to optimize travel times, but exposes the network to the vulnerability of congestion in the canal.
The combination of the new OCR service and the requests for additional capacity to India creates a physical bottleneck. The Suez route, while shorter, requires precise management of departures to avoid cascading delays. CMA CGM, managing this complexity, uses the Peak Season Surcharge (PSS) as a financial lever to offset high operating costs and limited space on ships traveling through this high-intensity corridor.
Impact on Working Capital and Operational Strategy
The imposition of $100/TEU has a direct impact on the cost of goods sold (COGS) for companies that import from India or export to Northern Europe. This additional cost is not temporary, but reflects a structural tension in the global supply chain. For CFOs and supply chain managers, the challenge is not only to manage the surcharge, but to predict its duration in relation to the evolution of port congestion.
The operational strategy must therefore consider alternative routing options or long-term contractual negotiations. CMA CGM’s PSS indicates that the market has not yet found a balance between demand and capacity on the Suez-Europe route. The continuity of the Ocean Rise Express service will depend on the company’s ability to manage operational delays without compromising the reliability of deliveries, while maintaining the profitability of transcontinental services.
Photo by Markus Winkler on Unsplash
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