COSCO Resumes Bookings as Gulf Shipping Outlook Improves

The container shipping sector showed signs of renewed confidence in the fourth week of the Persian Gulf conflict, as China’s state-backed COSCO Shipping Lines announced it would restart bookings for standard containers from the Far East to the Middle East with immediate effect. This decision reverses a suspension introduced on March 4, when escalating tensions and restrictions around the Strait of Hormuz made the trade route commercially unviable.

COSCO’s resumed services will cover key regional markets, including the UAE, Saudi Arabia, Bahrain, Qatar, Kuwait, and Iraq. The move comes shortly after Chinese Foreign Minister Wang Yi spoke with Iranian Foreign Minister Abbas Araqchi on March 24, encouraging Tehran to engage in talks with Washington to help bring the conflict to an end. This suggests China is actively seeking to stabilize trade routes that are critical to its shipping operations.

Limited Access Through Hormuz

South Korea has also received some relief. Iran’s ambassador to Seoul, Saeed Koozechi, confirmed that South Korean vessels may pass through the Strait of Hormuz, provided they coordinate in advance with Iranian authorities.

“There are no problems with the vessels,” Koozechi said through an interpreter. “But in order for them to pass through, you need coordination, prior consultations with the Iranian military and government.”

Significant Impact on Global Shipping

According to BIMCO’s chief shipping analyst Niels Rasmussen, around 130 containerships remain stranded in the Gulf, representing approximately 1.5 percent of global fleet capacity. He estimates that about 3 percent of global container volumes are currently unable to move, directly affecting roughly 5 percent of global vessel demand. Because many ships operating in the Gulf also serve ports in Pakistan and India, the broader impact extends to nearly 10 percent of the global fleet.

BIMCO has modeled two possible scenarios: one where the Strait of Hormuz remains effectively closed and another where operations resume soon. However, Rasmussen noted that challenges remain in both cases.

“Whether the Strait of Hormuz remains effectively closed or not, we expect a slight weakening of the global supply/demand balance in 2026 and 2027. However, if transits do not resume, liner operators will face substantial extra costs due to higher oil prices while cargo volumes will be reduced,” he said.

Structural Challenges in the Region

Turloch Mooney, global head of port intelligence and analytics at S\&P Global, highlighted the structural limitations of the region.

“Unlike the Red Sea, there is no maritime alternative to the Gulf’s major hubs,” he said in a recent social media post. “Short-term feeder relays aren’t a solution; they are simply bottleneck migration.”

Mooney described the Gulf as a geographical cul-de-sac and used the term “network bifurcation” to describe a situation where shipping schedules have become increasingly unreliable.

Freight Rates and Market Response

Despite ongoing disruption, freight rates have started to ease. According to Linerlytica, the initial rate increases triggered by the Middle East situation have been offset by the redeployment of vessels to alternative routes.

Capacity utilization across major trade lanes remains too low to sustain the rate hikes introduced in mid-March, leading carriers to roll back those increases. Early signals from new transpacific contracts suggest rates are holding close to last year’s levels, although shippers are facing higher fuel surcharges.

Operational Adjustments

On the operational side, Hapag-Lloyd has introduced free live tracking for both dry and refrigerated containers in the region. This allows customers to monitor their shipments in real time, providing greater visibility during a period of continued uncertainty.

Overall, while challenges remain, recent developments suggest a cautious shift toward stabilization in the container shipping market.