When will the current surge in ocean freight rates come to a halt?

There are five primary, underlying reasons for this wave of price increases:
1. The traditional peak stocking season for Europe and the US-usually starting in July or August for autumn/winter and Black Friday/Christmas inventory-began one to two months early this year. This coincided with Amazon Prime Day and procurement for the World Cup (hosted by the US, Canada, and Mexico), leading to a simultaneous surge in cargo volumes and significant year-over-year growth on Asia-Europe and Trans-Pacific routes.
2. Rising costs driven by conflict: Geopolitical tensions in the Middle East have pushed up crude oil prices, with marine fuel costs rising nearly 70% this year. Bunker Adjustment Factors (BAF) are being raised monthly, directly passing costs to shippers and causing freight rates to skyrocket. War risk insurance premiums for Red Sea routes have doubled, while port storage and container demurrage fees have risen alongside congestion; the resulting increase in total logistics costs has forced up base freight rates.
3. The "new normal" of Red Sea diversions has caused a permanent loss of effective capacity. Ships are bypassing the Suez Canal in favor of the Cape of Good Hope, adding 7–12 days to one-way voyages and reducing the number of annual round trips per vessel by 20–30%. This has directly reduced global effective capacity by 7–10%-equivalent to the sudden loss of 2.5 million TEUs of capacity-a gap that new ship deliveries this year cannot possibly fill.
4. Carriers are proactively managing capacity and canceling sailings to support rates. Major alliances-including MSC, Maersk, CMA CGM, and COSCO Shipping-are cutting redundant sailings and implementing monthly rate hikes. They issued multiple price increase notices throughout June to maintain tight capacity and prevent rates from falling.

Phased forecast:
1. Short term (Now through the end of July): Price increases will continue, pushing rates to new highs.
The rush to ship goods before the July 24 tariff deadline shows no signs of abating, and capacity will remain tight throughout July; carriers have already announced another round of rate hikes for the month. Upward momentum on US routes is expected to ease only after the tariffs take effect in late July.
2. First turning point: Early August-the end of the upward cycle. Three simultaneous conditions triggering the end of rate hikes: 1) US tariff policies have taken effect, the rush to ship goods has subsided, and cargo volumes on US-bound routes have dropped significantly month-over-month; 2) Stocking for mid-year sales in Europe and the US is largely complete, importer inventories are replenished, and shipments for new orders have slowed; 3) Following multiple rounds of rate hikes by carriers in July, shippers are facing cost pressures and are voluntarily reducing expedited shipments, cooling the market's rush to secure space.
Conclusion: It is predicted that rate hikes across all major trunk routes will cease in early August; freight rates will stop hitting new highs and instead enter a phase of fluctuation at elevated levels.

3. Second Phase (August – Mid-September): Rates stabilize without a sharp drop; sideways movement at high levels.
Although rates will stop rising, the three core constraints-Red Sea diversions, high fuel costs, and tight capacity-remain in place. Consequently, freight rates will not fall rapidly but will continue to fluctuate at the year's high levels; only a few niche routes will see minor pullbacks of 5%–10%.
4. Window for significant decline: Late September – October.
The peak season for pre-stocking for Black Friday and Christmas will end, leading to a seasonal decline in cargo volume. If the situation in the Middle East and the Red Sea does not deteriorate further-and assuming expectations for the gradual resumption of Suez Canal transits materialize-effective capacity will loosen at the margin, triggering a sustained downward trend in freight rates. However, if the Red Sea conflict escalates, the Strait of Hormuz faces a prolonged blockade, or the US announces comprehensive tariffs on Chinese goods, rate hikes could persist until the end of August (only stopping in September), resulting in a significantly higher baseline for freight rates throughout the year.