July 2026 Freight Market Update

July 2026 marks the peak of an unexpectedly early and intense freight season. Asia to Australia space remains critically tight, with rollovers across all major carriers and vessels running above full utilisation. On transpacific lanes, pricing has eclipsed 24-month highs ahead of a 1 July GRI that is expected to hold, at least partially. The drivers are a combination of structural congestion, frontloading, restocking, and growing concern about potential new tariff increases on 56 countries under US trade representative investigation. Relief is expected from late July into August as additional capacity comes online and the frontloading rush subsides, but the US East Coast and Gulf Coast will remain under pressure through mid-July. The second half of the year is expected to see a significant demand drop-off.

Ocean Freight, Oceania and Australia

Peak Season Is Here, Earlier and Harder Than Expected

There is no longer any ambiguity about where the market is. Asia to Oceania is firmly in peak season, and the traditional boundary between peak and slack is becoming increasingly blurred in a post-COVID freight environment. The drivers are multiple and compounding: structural congestion building in major Chinese ports over recent months, continued blank sailings and capacity omissions, frontloading and stock replenishment demand, and underlying consumption-based demand. No single factor is responsible. The combination of all of them arriving at once is what is making conditions so intense.

Rollovers and Booking Lead Times

Consecutive rollovers from all major carriers out of China into Australia are now the norm rather than the exception. Minimum booking lead times of four weeks are required. Attempting to book inside that window on most carriers will result in cargo sitting rolled until space can be confirmed.

New Services Coming

Two new dedicated services are being deployed from late July. MSC and the A3 alliance (comprising all ACL carriers) will together add approximately 6,000 TEU of consistent weekly allocation out of main Chinese ports into Australia’s East Coast. This is a meaningful addition and should begin to ease loading pressure as we move through the back half of July. The fact that carriers have committed to new services rather than one-off extra loaders signals that they expect elevated demand to continue for a sustained period.

Europe and USA to Australia

Business as usual on these lanes. Attention is rightly focused on the Asia corridor given the scale of the disruption there. Europe and US to Oceania are operating normally, with only isolated operational issues rather than any systemic capacity or demand problem.

Ocean Freight, North America

Rates at 24-Month Highs

Transpacific pricing has eclipsed levels not seen in two years. A significant GRI is expected to be implemented on 1 July and is expected to hold for the most part, though conditions are expected to diverge quickly between trade lanes.

US West Coast

LA and Long Beach are expected to see the 1 July rate increase, but pressure is likely to ease relatively quickly on these lanes as extra loaders and additional capacity deployed by carriers begin to take effect. Rates on Pacific Southwest lanes may begin to fall in the back half of July.

US East Coast and Gulf Coast

A considerably tougher picture. Vessels are full. Carriers have implemented strict weight restrictions on containerised cargo moving through the Panama Canal. IPI locations will continue to be under significant pressure. The first half of July is expected to remain very difficult on these lanes, with improvement not anticipated until mid-July at the earliest.

Demand Drivers

Two factors are sustaining the current demand spike beyond the frontloading and NAC-rate rush that drove the June surge.

First, US trade representative investigations into forced labour and unfair trade practices are ongoing across 56 countries. If those investigations conclude in early July and result in implementation of new tariffs, importers could face increases of 10% to 12% on forced labour grounds and up to 25% on unfair trade practice grounds. Vietnam is the primary country in focus on unfair trade practices, having absorbed a significant share of production that shifted out of China in recent years. Importers are moving product now to get ahead of any announcement.

Second, Q1 and Q2 sales results came in stronger than expected for many companies. Restocking and replenishment demand is pulling forward to ensure shelves are stocked ahead of the holiday period.

Outlook for H2

The retail federation is now forecasting year-over-year volume declines of 8% to 10% in the second half of 2026. The current spike is expected to be an early peak season, not the beginning of a sustained demand cycle. Conditions are expected to begin normalising as we move into August. Whether a second demand spike emerges later in the year will depend largely on the outcome and timing of the US trade representative tariff investigations. If those are delayed into September, importers will likely push more product once there is clarity on the new rates.

Key Numbers, July 2026

Contributors

Ioannis Papanthimos, Head of Ocean Product

Dave Burns, CEO North America