By Vincent Wen    Photo：CANVA

Following the good news of alleviated drought conditions at the Panama Canal, many importers and exporters anticipated a drop in shipping prices last month. However, on June 15th, ocean freight rates on the Europe and America routes increased by $1,000, shattering their expectations.

Traditionally, August is the peak season for the international shipping industry due to Thanksgiving and Christmas. However, several factors have caused the peak season to arrive earlier this year:

Red Sea Crisis: Last month's news reported "significant progress" in negotiations between Palestinian armed groups and Israel, leading many to optimistically expect the normalization of European routes. However, the negotiations broke down, and on June 12th, the Houthis sank another ship, leading to an expected further rise in prices. The increased transportation time and costs have affected not only Europe but also caused rapid price hikes on American routes and air freight.

EU Imposes Tariffs on Chinese Electric Vehicles: The EU has announced the temporary imposition of additional tariffs of up to 38% starting in July. Brazil and Turkey have also announced increased tariffs on Chinese electric vehicle products. This news has led to a surge in exports of electric vehicles before the tariffs take effect, driving up shipping costs.

German Verdi Union Strike on June 17th: On Monday, the German Verdi union initiated a strike, bringing cargo and container handling at Germany's major ports to a near halt. The strike has spread from Hamburg and Bremen, Germany's main container ports, to include Bremerhaven and Emden. Maersk has issued an urgent warning to customers, indicating that its shipping network is expected to be severely affected by the strikes at Germany's main ports. According to Maersk's assessment, multiple planned voyages will be disrupted and delayed, particularly impacting routes to Finland.

Peak Season Surcharges: Shipping companies such as Maersk, MSC, and CMA CGM will begin charging a Peak Season Surcharge (PSS) of approximately $2,000 to $2,500 to contracted customers on U.S. routes starting July 1st. With these major shipping companies raising prices, if the volume of goods between Europe and America continues to increase into the third-quarter peak season or even grows more intense, prices will continue to soar.

Additionally, limited space is a significant issue. Shipping companies are struggling to meet the growing demand on Europe and America routes. Even with high shipping fees, companies may not have available space. The strong demand from importers and exporters has also shifted some ocean freight demand to air freight, causing those prices to rise as well.

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