Peak season impacts global trade pricing each year, just ahead of back to school, Thanksgiving and Christmas holiday shopping. In recent years, looking as far back as 2014 the industry has seen soft or absent Peak Seasons and pricing from steamship lines has been weak.
This year, Peak Season seems to have hit quite strongly and abruptly. Importers saw back to back increases in the spot market July 1, July 15 , August 1, and August 15. Some spot markets and trade lanes have increased as much as 35% since May 1. Looking to September though, it appears Peak Season is beginning to wind down. While space has been critical in many ports of Asia through August, capacity utilization appears to be improving moving into September.
Coupled with this is the belief that much of Peak Season this year is actually a direct result of the Trade War Tariffs levied by President Trump. Three major lists were announced, one of which has become effective and the second to go active tomorrow, August 23. The final list, which more greatly impacts consumer goods and much of the remaining items manufactured in China particularly is expected to become effective in mid to late September. Importers are still rushing goods out of factories in Asia to reach their US West Coast destinations ahead of the proposed tariff increases.
If imports do begin to slow, importers can expect swift and aggressive reductions to spot markets across Asia. Rate indications at this time point to a flat September 1 rate index with reductions possible as the month progresses.