Christmas is arriving ahead of schedule this year, leading to an increase in shipping expenses. A surge in early bulk orders for various items, ranging from holiday embellishments to household furniture, has driven maritime shipping costs to their highest levels in four years due to uncertainty surrounding tariffs and the conflict in Iran. This trend is especially noticeable in the United States, with retailers and importers hastening to secure shipments before the potential imposition of new U.S. tariffs on numerous countries expected by the end of July.
Industry experts highlight that the spike in demand is causing a rise in seaborne transportation rates worldwide. The main reason for the escalating freight costs, according to Judah Levine, head of research at shipping platform Freightos, is the early onset of peak-season demand. He attributes this “front-loading” phenomenon primarily to anticipated tariffs and also to the surge in fuel prices resulting from the prolonged closure of the Strait of Hormuz.
Furthermore, long-term agreements between shippers and carriers, where fuel expenses are adjusted quarterly, mean that the carriers will pass on the increased fuel costs incurred over the past three months to shippers starting this summer. This, in combination with rising energy prices impacting manufacturers, is compelling shippers to expedite their orders.
According to the Platts Container Index, global shipping rates for containers surged approximately 80% in the 30 days leading up to June 24, reaching their highest point since April 2022. Rates for shipping containers from East Asia to North America’s west coast have escalated even further, with the average price for a 40-foot container soaring by 120% in the past six weeks to $6,200 US, as reported by Freightos.
John Corey, president of the Freight Management Association of Canada, noted that concerns about potential U.S. tariffs of at least 10% on countries under investigation for forced labor practices, as well as uncertainties surrounding the Canada-United States-Mexico Agreement, have contributed to the heightened shipping activities.
The recent White House announcement targeting Canada and other countries with additional tariffs over allegations of allowing goods produced by forced labor into American supply chains has added to the apprehension. Despite most exports from Canada to the U.S. being compliant with the existing trade pact and exempt from levies, the uncertainty surrounding the situation has prompted businesses to secure supplies in advance.
Lisa McEwan, co-owner of customs brokerage Hemisphere Freight, emphasized the impact of this ambiguity on the industry, advising clients to expedite their bookings and shipments. She highlighted that various goods, including clothing, holiday decorations, furniture, electronics, and building materials, are being ordered earlier than usual, ultimately affecting consumers who will face increased prices at the point of sale.
