Freightos Baltic: Frontloading ahead of transpacific tariff changes pulls peak season forward as Hormuz tensions add to pressure

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Ocean freight rates have surged sharply over the past six weeks, with no clear signs of relief yet. Asia to North Europe pricing has climbed to $5,800/FEU and Mediterranean routings to near $7,200/FEU, both roughly $3,000/FEU higher than six weeks ago, as successive rate increases have held. Transpacific lanes have moved further still, up $4,000/FEU since May, with West Coast rates near $7,500/FEU and East Coast pricing above $9,000/FEU. Carriers are pushing another $1,000/FEU increase this week.

The rally has been driven mainly by an unusually early peak season rather than fuel costs. Frontloading ahead of transpacific tariff changes, combined with Hormuz-linked cost pressures prompting early east-west bookings, pulled demand forward to mid-May and has kept ports congested into July. The NRF projects July arrivals will hit a record 2.47 million TEU, but forecasts August and September volumes each falling 10 percent month on month, with early signs of opening capacity and discounting suggesting the peak may already be easing.

Behind the volatility, the Strait of Hormuz has effectively reset to pre-ceasefire conditions. Iran now claims the strait is closed to vessels lacking its clearance or using non-northern lanes, and is striking non-compliant ships. Washington is reinstating its blockade on Iran-linked shipping while insisting transit remains open via Oman's southern lane. Trump has further floated a US takeover of the strait with a 20 percent cargo fee, though the feasibility of both claims is doubtful.

The renewed standoff has already lifted energy prices, with oil up 10% to mid-June levels and bunker costs up 5%, reversing the decline that had followed the earlier ceasefire. Further upward pressure looks likely, though earlier market adjustments should cap any return to the war's initial highs. Carriers remain reliant on longer, costlier alternative routings, and any tentative return to Red Sea transits looks set to reverse again.

Fuel costs are unlikely to drive near-term rate moves, however: just as easing bunkers didn't cool spot rates during the ceasefire, this increase shouldn't push rates up while peak season demand dominates. Sustained elevated fuel costs will add gradual pressure over time, with normalization now looking further off than it did weeks ago.

Written by: Farid Muzaffar