The May ’26 freight market update reflects the month which has shaped up as one of the more demanding months for importers in both Australia & New Zealand since the pandemic era. Geopolitical disruption in the Middle East isn’t any longer a background risk. It actively reshaped freight routes, including inflated insurance besides fuel costs. It also squeezed capacity on key lanes in Australia. Rates, which had previously remained relatively steady in the early part of the year, experienced a sharp movement. The coordinated nature of carrier rate actions in May signalled that the increases were likely to remain medium-term.
The scenario isn’t uniformly negative. Schedule reliability has improved. Congestion at several key regional hubs has eased somewhat. As such, volumes remain solid. The cost of the environment demands close attention. This freight market update covers the changes that have occurred. Additionally, this update will discuss the implications for supply chains and identify potential risks in the coming months.
Middle East disruption
The situation at the Strait of Hormuz has gone well beyond a short-term disruption. Since early March 2026, daily ship transits through the strait have declined rapidly by approximately 95%. This decline is from a pre-conflict average of 125 to 140 vessels each day, reduced to only about 6 vessels. This is not a minor mistake. It represents a near-complete halt to one of the world’s most strategically important shipping corridors.
Vessels that do transit must obtain prior clearance from Iran’s Islamic Revolutionary Guard Corps (IRGC). This means moving within Iranian-designated corridors rather than an internationally recognised traffic separation scheme. The Joint Maritime Information Centre maintains a critical risk classification across the Arabian Gulf and Strait of Hormuz, besides the Gulf of Oman. The report cites active missile threats, UAV threats, mine risks, GPS spoofing, and continuous vessel seizures. Firing upon or detaining many container ships, including those operated by MSC, has become a common occurrence. Most major carriers have responded by suspending the acceptance of bookings. This resulted in voiding voyages or rerouting cargo away from the Gulf ports entirely.
Red Sea update
The Red Sea scenario has improved in isolation. However, the Hormuz crisis complicates the situation. The JMIC has moved the Bab el-Mandeb, Gulf of Aden, beside the southern Red Sea, to a moderate-risk rating. With no confirmed maritime attacks in recent weeks, Houthi rhetoric continues. Suez Canal transits are operating normally in the Northern Red Sea. The situation is with the Suez Canal itself rated moderate.
Around 50 vessel transits were recorded through Bab el-Mandeb in a 72-hour window until 26 April ’26. Vessels are moving, but volumes remain well below pre-’23 levels. CMA CGM has begun rerouting two services back through Suez. This move may encourage other carriers to follow likewise. However, the Arabian Gulf, besides the Gulf of Oman, remains critical. Carriers evaluate the region as a connected risk zone when compared with a series of separate passages. A return to normal Suez Canal operations is therefore unlikely. This is while the Hormuz effectively remains closed.
Meantime, Somali piracy has resurfaced as a concern. The JMIC upgraded the Somali coast, besides the Somali basin, to substantial risk. This decision followed a cluster of incidents in late April ’26 that included reported vessel boardings. The longer Cape of Good Hope route, which many carriers have chosen as an alternative to Suez, is now riskier.
The Suez Canal Authority’s decision to withdraw its 15% transit fee discount, especially for large containerships, effective 7 April ’26, is also telling. The rebate was introduced to draw vessels back to transiting the Suez Canal. Its removal reflects the authority’s own acknowledgement that pricing incentives haven’t been sufficient to transform carrier behaviour where underlying security risks are sustained.
