Ocean Freight Rates Surge on Trade and Geopolitical Shifts

Ocean Rates Rise Reflecting Rising Trade Pressures

Middle East Tensions Add Uncertainty

Container Volumes Frontloaded Amid Trade Talks

Shippers have been frontloading peak season goods. This started after the May de-escalation between the U.S. and China. The goal: avoid rising tariffs in August.

A possible China–U.S. trade deal is in the works. But current tariffs—30% on Chinese goods and 10% on U.S. exports—will likely stay in place. Until a deal is signed and the risk is mitigated, shippers will likely keep rushing orders in advance.

Volumes may decline in late summer. Shippers have already moved some of their fall goods early. This could soften July arrivals and overall Q3 volumes.

International shipping rates have surged, but some analysis suggest that they may now be peaking. FBX spot prices for the U.S. West Coast dropped 3% on the day, despite last week's large average rise. That suggests a market cooling. Carriers rapidly added capacity back to the market. Some expected a demand spike. But demand may not meet this new capacity. Reports show half-full ships and canceled ad hoc sailings.

Some of the new transpacific capacity came from Asia–Europe lanes. With port congestion and rising European demand, carriers are shifting again. This volatility adds pressure to all lanes. Asia–Europe rates rose 6% to $2,925/FEU last week. Peak season shipping in Europe appears to be starting. Rates are up 24% in June, and could rise with mid-month GRIs. The Asia–Mediterranean route saw a 13% surge making rates nearly 50% higher than late May.

Demand is solid, but some carriers may have overextended in these markets as well. If this continues, prices could adjust downward again before the quarter end.

International Shipping Support