Multiple Houthi missile attacks on Saudi Arabia’s Riyadh airport since late last week mark another serious escalation of the Saudi – Houthi conflict. Saudi Arabia has promised retaliation for the deadly strikes which have shut down airport operations in Riyadh. Interceptions at the airport in Dammam and attacks on other airports have led to disruptions and cancellations at other hubs as well. The Houthis sought to close the Bab el-Mandeb Strait to Saudi-linked traffic in July, attacking several vessels into August after nearly nine months of quiet. The current escalation may increase the likelihood of renewed Red Sea strikes. Container carriers have nonetheless gradually increased Asia – Europe Red Sea transits since June, which is one factor – with a post-peak season slide in demand the bigger factor – to uninterrupted spot rate decreases on these lanes since July. Shippers and carriers on these trades are now entering tendering season for 2027’s annual ocean contracts. This time last year carriers reduced capacity and pushed through a series of Q4 GRIs to raise the benchmark around which long term negotiations were based. Some carriers have already announced October rate increases and Asia – Mediterranean prices increased 7% to $3,800/FEU last week. But even with the rate decreases since July, prices are still quite elevated at more than $3,000/FEU on both lanes and are about 70% higher than they were last year, working in carriers’ favor even without additional increases. But current rate levels are partially being supported by lingering congestion in N. Europe – though a strike at German ports that could have made things worse was recently averted – and in the Far East. Fleet growth through newbuild deliveries next year and the possibility that Red Sea transits will continue to increase effective capacity in 2027 also have some shippers expecting rate levels may ease next year, and hesitant to lock in annual rates at current levels. On the tran