Christmas is arriving sooner than usual this year, leading to a rise in shipping expenses. An influx of early bulk orders ranging from festive ornaments to household furniture has driven up maritime shipping costs to their highest in four years due to uncertainty surrounding tariffs and the Iran conflict. This surge is mainly attributed to retailers and importers, particularly in the United States, hurrying to secure shipments ahead of anticipated new U.S. tariffs affecting multiple countries by the end of July.
Experts in the industry point out that the increase in demand is causing a global hike in seaborne transportation rates. Judah Levine, head of research at shipping platform Freightos, highlights that the early onset of peak-season demand is the primary reason behind the soaring freight rates. He links this “front-loading” trend to expected tariffs and also to the rise in fuel prices resulting from the prolonged closure of the Strait of Hormuz.
Long-term contracts between major shippers and carriers, which adjust fuel costs quarterly, are now passing on the higher fuel expenses incurred over recent months to shippers starting this summer. Importers and manufacturers, facing increased energy prices, are further motivated to expedite their orders. The Platts Container Index reveals a remarkable 80% surge in global shipping rates for containers in the 30 days leading up to June 24, reaching their highest level since April 2022.
Rates for shipping containers from East Asia to North America’s west coast have surged even more, with the average price of a 40-foot container jumping 120% over the past six weeks to $6,200 US, according to Freightos. John Corey, president of the Freight Management Association of Canada, notes that people are stockpiling goods due to concerns over possible U.S. tariffs, along with uncertainties related to the Canada-United States-Mexico Agreement.
The White House has indicated that Canada, along with the European Union and 59 other countries, might face additional tariffs over allegations of allowing goods produced by forced labor into the American supply chain. Despite most merchandise from Canada being compliant with the existing trade pact and exempt from levies, the July 1 renewal deadline for the agreement has fueled some apprehension.
Lisa McEwan, co-owner of customs brokerage Hemisphere Freight, emphasizes the urgency for clients to expedite bookings and shipments amid the prevailing ambiguity to avoid potential cost escalations. Clients are proactively ordering various items like apparel, holiday decorations, furniture, electronics, and building materials earlier than usual, with the eventual burden likely to fall on average household consumers at the checkout counter.
