We have made changes to our base case, raising our freight prices and margins for 2026, which forecast containers shippers will reroute around the Cape of Good Hope in 2026.
Why it matters: For container shippers, freight prices are the primary drivers of industry success or failure, with margins closely correlated with them. Rerouting around the Cape of Good Hope increases freight prices, which historically benefited container shippers.
- Roughly 10% of global seaborne trade is through the Suez Canal, and the extra time to make a detour around the Cape of Good Hope equated to a 15%-20% reduction in effective capacity on those routes, of 4.5%-6% of global capacity.
- The reclosing of the Suez Canal helps offset the global order book increase and will continue to artificially prop up freight prices, most significantly affecting our 2026 and 2027 forecasts.
The bottom line: We have increased our fair value estimates for Maersk and Hapag-Lloyd by 7% and 8%, respectively, to DKK 13,200 and €107.5. At current levels, shares are overvalued.
- When the container shipping market is materially oversupplied, it puts downward pressure on freight rates, a significant factor in this year’s price movements. This will become worse once ships can resume sailing through the Red Sea, which we factor into the later years of our forecast
