Shipping prices are expected to continue to rise in June. What are the reasons behind this?

Since the Sino-US economic and trade talks on May 12, a series of changes in the trade environment have caused waves in the shipping market. The United States will reduce the reciprocal tariff on China from 125% to 10%, but the policy only has a 90-day window period. May and June are the peak period for cross-border trade stocking. The interweaving of various factors has caused a sharp increase in the pressure on the entire shipping market, and shipping prices have risen sharply. It is expected that in the next three months, especially on the Sino-US route, the volume will increase significantly. 

On May 24, Mediterranean Shipping MSC issued an announcement that due to the strong trade demand from the Far East to the Mediterranean (including the Adriatic Sea), the Black Sea and North Africa, a peak season surcharge (PSS) will be imposed on all goods and commodities (including refrigerated goods and special equipment). From June 7, 2025 (departure date) until further notice, PSS will be charged at US$550/TEU for all types of containers.

It is not difficult to see that the rise in shipping prices in June is inevitable. So what factors have triggered this storm of rising shipping costs?

1.High demand during peak season

May and June are the traditional peak shipping periods for international cross-border trade. On the one hand, suppliers need to seize the golden period of shipment to increase exports, and on the other hand, they need to prepare for subsequent autumn and winter festivals such as Thanksgiving and Christmas. A large amount of goods need to be replenished and distributed during this period, and the market demand for shipping capacity has increased sharply.

2. Tariff policy window period stimulates exports

This time, the tariff was reduced from 125% to 10%, with such a large adjustment and only a 90-day suspension window period. Many suppliers hoped to deliver goods to the US market at a lower tariff cost before mid-August, which directly led to a surge in shipments in the short term, far exceeding the usual freight demand. Overseas buyers also increased their purchases, hoping to take advantage of this policy bonus period to stock up more goods.

3. Shipping company space shortage

Due to the uncertainty of trade policies in the early stage, some shipping companies have deployed their capacity to other relatively stable routes to reduce risks, thereby reducing the original supply of capacity to the US market. When the demand for shipments suddenly increases significantly, it takes a certain period of time for the capacity to recover, which leads to tight shipping space in the short term, and then the freight rate soars.

4. Increased shipments to compete for shipping capacity

Even under normal circumstances, the demand for shipping has already begun to rise gradually. Now that tariffs have dropped significantly, the demand for shipments has been further amplified. Many sellers have increased their order volumes and rushed to arrange cargo transportation, further intensifying the market's competition for shipping capacity, making the already tight space even more in short supply.

The essence of this surge in shipping costs is the result of multiple factors such as the adjustment of Sino-US tariffs, the peak period of stocking, and the allocation of shipping companies' capacity. Buyers and sellers can plan the shipping time as early as possible by placing orders and shipping early, and in this wave of rising shipping costs, safeguard the interests of both parties and achieve a win-win situation.