Container shipping majors are out with peak season surcharges for mid-June and early-July, driven by soaring demand amid an early onset of peak season as US importers rush to get goods into the country before Section 301 tariffs take effect.

The United States Trade Representative (USTR) on 2 June proposed tariffs on Canada, the EU and 58 other countries for allegedly failing “to impose and effectively enforce a prohibition on the importation of goods produced with forced labor”.

Freight forwarder Zencargo said the ongoing blockade of the Strait of Hormuz and continued rerouting around the Cape of Good Hope because of the Red Sea crisis continues to put a strain on shipping networks amid a demand spike.

“On the Transpacific, this spike is largely driven by shippers rushing to move cargo ahead of impending July tariffs,” Zencargo said.

ANNOUNCED SURCHARGES
CMA CGM announced surcharges of $1,300/TEU (20-foot equivalent unit) and $2,600/FEU (40-foot equivalent unit) effective 1 July for dry cargo originating from the Eastern Mediterranean to the US East Coast, one of the highest rates seen so far this season.

The carrier is also seeking surcharges of $300/TEU and $600/FEU from the Western Mediterranean to Canada and the US East Coast from 1 July.

Hapag-Lloyd announced $300/TEU and $600/FEU surcharges from the Mediterranean to the US and Mexico effective 1 July.

The carrier is also seeking a $1,000/container charge for cargo from the Indian subcontinent, Pakistan and Saudi Arabia to North America from 1 July.

SURGING RATES
Rates have been surging and are expected to continue with the upward momentum at least until the end of July.

Weekly spot rates soared this week as tracked by supply chain advisors Drewry.

On the Transpacific trade route, spot rates climbed again this week, with Shanghai to Los Angeles rising 31% to $4,565/FEU and Shanghai to New York increasing 20% to $5,505/FEU.

“Demand is being supported by shippers bringing forward bookings ahead of potential US tariff changes expected in July,” Drewry said. “Carriers successfully implemented peak season surcharges on the transpacific eastbound trade route starting this month. With peak season now underway and seasonal demand strengthening through June, Drewry expects further upwards pressure on rates in the coming weeks.”

Rates from Drewry are now around double from where they were at the start of the US-Iran conflict.

Rates from Asia to the East Coast from online shipping marketplace and platform provider Freightos are up by 54% from the start of the war and rates to the West Coast are up by almost 78%.

Rates from Xeneta and FreightRight also show similar increases.

Rates on the Shanghai Containerized Freight Index (SCFI), which tracks rates for containers leaving Shanghai, are up by 93% since the start of the conflict.

Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers.

They also transport liquid chemicals in isotanks.

Source: ICIS by Adam Yanelli