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The cost of freight shipping has risen to its highest since the Red Sea crisis two years ago as businesses rush to stockpile inventory ahead of a fresh round of US tariffs.
Rates on routes between Asia and the US east coast, and Asia and Europe, last week hit their most expensive levels since the summer of 2024 when the crucial trade artery was in effect closed after a series of missile and drone attacks on merchant ships by Houthi rebels in Yemen.
Executives said anticipation of new US tariffs next month had brought forward the annual increase in shipping demand that usually starts as retailers filled inventories before the Black Friday and Christmas shopping periods.
The price of a 40ft container (FEU) — an industry-standard measure — between China and the US east coast rose to $7,880 last week, up 62 per cent from a month earlier, according to shipping platform Freightos. Rates between China and the Mediterranean jumped 47 per cent to $6,431.
The Platts Container Index, which measures rates for shipping ocean containers across key global trade routes, climbed 80 per cent in the 30 days to Wednesday, reaching its highest level since April 2022.
The Trump administration is planning to impose tariffs of at least 10 per cent on dozens of countries from late July following a probe into forced labour practices. Further tariffs on industrial goods are due to be announced next month.
“Uncertainty around tariffs and bunker costs has triggered frontloading of cargo, particularly into the US, pushing freight rates sharply higher,” said BIMCO, the largest shipowners’ association.
The Office of the US Trade Representative this month said it intended to impose tariffs on 60 countries for not doing enough to prevent the import of goods manufactured using forced labour, putting American workers at a disadvantage.
China, the EU, India, Japan and the UK are among the major economies targeted by the proposal, which would set tariffs of between 10 per cent and 12.5 per cent. The US wants new levies to be ready when a global 10 per cent tariff expires on July 24.
Businesses are “trying and where it makes sense for them to get cargo before that deadline into the US, or at least a portion of their goods,” said Michael Aldwell, executive vice-president for sea logistics at Kuehne+Nagel, the world’s largest freight forwarder by volume.
Judah Levine, research lead at Freightos, said higher rates were also caused by customers and freight forwarding companies bringing forward shipments to avoid potential disruption in the summer and increased fuel costs as a result of the current Middle East crisis.
Typically, companies with long-term contracts pay for fuel on a quarterly basis to account for price fluctuations.
Major importers were “pulling some of their peak season volumes ahead of that July increase”, Levine said.
Jonathan Colehower, managing director for global operations and supply chains at technology company UST, said geopolitical ructions and trade measures had prompted some companies to plan further ahead than they did previously.
“They may be overcommitting or over-ordering . . . but many companies are thinking I would rather be safe than sorry.”
Prices per FEU remain short of highs of $9,800 recorded in 2024, according to Freightos, when Houthi strikes forced ships to divert from the crucial trade corridor and go around the Cape of Good Hope, increasing journey times by up to two weeks.
