Shipping costs soar as retailers try to secure orders ahead of fresh
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Christmas is coming early this year. And it’s pushing up shipping rates.
A glut of early wholesale orders for everything from holiday decorations to home furniture has propelled maritime shipping costs to four-year highs as a result of tariff uncertainty and the Iran war, with potential repercussions for consumers.
Industry specialists say retailers and importers — especially in the United States — are rushing to book shipments to get ahead of a potential fresh round of U.S. tariffs on dozens of countries that’s expected near the end of July.
The surge in demand is boosting seaborne transport prices across the globe.
“Taken together, the early start to peak-season demand is the main cause of spiking freight rates,” said Judah Levine, head of research at shipping platform Freightos, in an email.
He attributed the “front-loading” primarily to presumed tariffs, but also to fuel price increases that stem from the months-long closure of the Strait of Hormuz.
Large shippers have long-term contracts with carriers under which fuel costs are adjusted quarterly. The higher fuel costs those carriers incurred over the past three months will be passed along to shippers starting this summer, Levine said.
The Trump Administration has announced a plan to impose new tariffs on at least 60 countries, including Canada, claiming they’ve allowed goods made by forced labour into the U.S. supply chain. Canada would face a 10 per cent export tariff on all non-CUSMA compliant goods.
Similar arrangements between importers and manufacturers — whose costs have also gone up due to the spike in energy prices — give shippers all the more motivation to get their orders in now.
“In this sense, part of the early jump [in shipping] is an indirect impact of the Hormuz closure,” Levine said.
According to the Platts Container Index, global shipping rates for containers leaped about 80 per cent in the 30 days ended June 24 to hit their highest level since April 2022, when pandemic-related supply chain problems peaked.
Rates close to home have vaulted even higher. The average price of a 40-foot container hauled from East Asia to North America’s west coast climbed 120 per cent over the past six weeks to $6,200 US, according to Freightos.
“People are stocking up,” said John Corey, president of the Freight Management Association of Canada.
Angst over potential U.S. levies of at least 10 per cent on countries undergoing an American probe into forced labour practices makes up part of the explanation. So does the fragility of the Canada-United States-Mexico Agreement, whose July 1 renewal deadline just passed.
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