Dry Bulk Freight Rates Hit Three-Year High

Dry bulk freight rates rose approximately 36% between February and July 2026, reaching their highest levels in three years. According to Bank of Baroda Research, the surge is driven by a combination of robust demand for infrastructure and agricultural commodities, rising international oil prices, and geopolitical instability caused by a war between the United States and Iran.

The Supramax index experienced the most significant increase at 44%, while the Capesize and Panamax indices rose by 38% and 22%, respectively. Conflict surrounding the Bab-al-Mandeb and the Strait of Hormuz has forced shipping vessels to divert around the Cape of Good Hope, increasing operational costs and contributing to higher global commodity prices.

Other transport sectors have seen divergent trends. Domestic road freight rates in India have increased, while international air freight volumes dropped 53% between February and June. This decline in air transport is attributed to high fuel costs and the curtailment of established flight routes.