Trade Held Up in 2026 — Through Other Routes, and at Higher Cost
By Rebecca Osei, Head of Trade & Development Economics
On 8 October the World Trade Organization (WTO) raised its forecast for world goods trade. Its Global Trade Outlook and Statistics update now expects merchandise trade volume, meaning quantities with price changes stripped out, to grow 3.9 per cent in 2026 and 4.1 per cent in 2027. In March, its 2026 baseline was 1.9 per cent, and its high-energy-price scenario 1.4 per cent.
Merchandise trade volume grew 3.5 per cent in the first half, more than expected, the WTO reports. Investment in artificial intelligence lifted trade in AI-enabling goods such as semiconductors and servers, which accounted for 47 per cent of first-half growth in the value of merchandise trade. The WTO also finds that "global supply chains adapted to disruptions in energy and fertilizer markets". More fuels and fertilisers came from suppliers outside the Middle East, and "trade flows were rerouted through alternative ports and corridors".
Services fared worse. The WTO now expects commercial services trade volume to grow 3.3 per cent in 2026, against 4.8 per cent in its March baseline and 4.1 per cent in its conflict-adjusted forecast; transport and travel remain exposed to the conflict.
Adaptation, in the WTO's account, meant other suppliers and other routes. The World Research Institute's Gateway Access Monitor, read with industry estimates, shows what the second looks like, and the WTO documents its cost. The World Logistics Index adds a separate monthly signal.
Two Measures, Two Questions
| WTO merchandise trade forecast | World Logistics Index | |
|---|---|---|
| What it measures | Growth in the volume of world goods trade | Logistics activity across the 42 economies of the Logistics Growth Index (LGI), weighted by GDP |
| Period compared | A year against the previous year | A month against the previous month |
| Scale | Per cent change | Diffusion index: 50 means no change, above 50 expansion, below 50 contraction |
| Status | A forecast | A reading of the month just completed |
A diffusion index shows whether activity is rising or falling, and how strongly, but not by how many per cent. So the World Logistics Index's September reading, 51.6, is not a growth rate; it signals modest expansion. Neither measure can confirm the other.
The Long Way Round the Red Sea
The openly published Gateway Access Monitor tracks ship traffic at seven chokepoints, using monthly averages of IMF PortWatch daily transit counts built from ship-tracking signals. For the routes below, the reference is June 2023, a full month of undisrupted traffic before attacks on Red Sea shipping began that November.
Suez Canal traffic averaged 40.4 transits a day in September, 46 per cent below June 2023. Bab el-Mandeb, the strait at the Red Sea's southern entrance, averaged 26.6 a day, 65 per cent below. The ships went the long way: the Cape of Good Hope averaged 86.1 transits a day, 67 per cent above June 2023.
For Suez the pattern is not new: traffic sits on "the plateau near half of pre-crisis traffic now running for more than two years", the Monitor notes. At Bab el-Mandeb, September's average was the lowest monthly mean on the PortWatch series since January 2023, and the Monitor reads access there as worsening.
Some carriers are heading back. Maersk and Hapag-Lloyd said on 14 September that four more services would return to Suez; ship-tracking records in the Monitor show the first passage on 28 September and more ships following by 1 October, with no canal-authority record yet.
More Gulf Crude Leaves by Other Ports
The WTO estimates that in the first half, Middle East exports of crude oil fell by roughly 24 per cent year on year and those of liquefied natural gas (LNG) by around 47 per cent; other suppliers held the global declines to about 6 per cent and 1 per cent. Some crude bypasses the Strait of Hormuz by pipeline, to the Red Sea and to Fujairah, the WTO notes.
Kpler, a commodity-data firm, gave estimates in a note of 6 October, quoted in its public media briefings of 7 and 8 October and reported by Reuters on 8 October. In the week to 4 October, bypass routes on the Gulf of Oman coast and the Red Sea loaded 6.7 million barrels a day of crude, excluding Iran, more than twice the pre-war 2.9 million. Crude crossing the strait itself was at least 10.1 million barrels a day, excluding Iran: 74 per cent of its pre-war level. In total, crude leaving the region, excluding Iran, held at its pre-war level, at least 16.8 million barrels a day.
The bypasses carry their own risk: "In September, flows diverted through the Red Sea were interrupted due to further escalations in the conflict," the WTO notes. And, its report adds, "unlike oil, LNG cannot be easily diverted through pipelines".
The Cost of Rerouting
Transport services, the WTO's press release says, were affected by "the reorganization of shipping routes and sharply higher freight costs". On preliminary estimates, transport services trade rose 15 per cent year on year in value in the second quarter, as freight rates climbed; Asia–Europe rates have since eased, though trans-Pacific rates remained high in September. In volume, the WTO expects transport services to grow just 0.9 per cent in 2026. And rerouting towards alternative ports and trans-shipment hubs "has put pressure on capacity in South Asia. This is translating into higher charges," the report says.
A Separate Signal: Logistics in September
The World Logistics Index, published openly each month, read 51.6 in September, broadly unchanged on the month: modest expansion, with 30 of the 42 economies covered by the Logistics Growth Index (LGI) expanding. The two heaviest of the eight sub-indexes weighted into the headline, Business Volume (53.2) and Transportation (52.9), stood above 50 and rose on the month.
Transport Capacity fell 1.3 points to 46.5, the main drag on the headline: below 50, it signals that available transport capacity tightened on the month. The Logistics Cost diagnostic carries zero weight, so it did not move the 51.6. It rose 2.8 points to 63.3, the largest move of the ten sub-indexes, signalling logistics costs rising, and faster than in August.
These readings cover logistics in 42 economies, weighted by GDP, and do not isolate the effect of rerouting. Nor are they seasonally adjusted, and September leads into the fourth-quarter shipping peak, a calendar effect the methodology names; it advises watching the three-month average, not one month's move.
What This Means for Decision-Makers
- Read resilience as adaptation, not recovery. Trade held up because AI demand surged and suppliers and routes changed, not because the disruption ended. Passages back through Suez are not yet a return: a service is restored only when it uses the route rotation after rotation. Plan on the Cape staying in use.
- Budget freight lane by lane. An upgraded trade forecast does not mean easier logistics, and rates have moved differently on different lanes.
- Stress-test the bypasses. Red Sea diversion flows were interrupted in September, and LNG is harder to reroute than oil. Map which supplies depend on a single alternative route.
- Keep the measures apart. Use annual volume forecasts for demand planning and monthly diffusion readings, over three months, for direction. Never set one against the other.
The WTO's 2027 forecast depends, it says, on a timely resolution of the conflict. Until then, plan for the long way round.
Evidence and data cut-off: 9 October 2026. Third-party figures are as published by the cited sources. Kpler figures exclude Iran; they come from Kpler's note of 6 October by Emmanuel Belostrino and Yui Torikata, as quoted in Kpler's media briefings of 7 and 8 October and reported by Reuters on 8 October. Gateway Access Monitor transit figures are monthly means computed by the World Research Institute from IMF PortWatch daily counts, finalised for September on 8 October (ship-traffic sources: Kpler; UN Global Platform; IMF PortWatch, portwatch.imf.org); the Suez passages from 28 September are ship-tracking observations recorded in the Monitor. World Logistics Index readings are the World Research Institute's own. See our Research Standards.
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