Letter from the Editor

By Mark Szakonyi

One profitable quarter can make up for three weak quarters, so fortune favors the aggressive.

The intensity of the surge of US imports from Asia— rising nearly 20 % year over year and 13 % sequentially in May— exceeded retailer expectations and overwhelmed inbound ship capacity into late June.

The reasons for the surge and ensuing space crunch are many, reflecting not just the increased unpredictability of demand but also the diminishing importance of the trans-Pacific to ocean carriers as they shifted capacity to other trades.

This peak season came earlier— as it has in three of the last four years— because importers wanted to beat stiffer bunker fuel fees that start July 1 and higher US tariffs that kick in July 24. An earlier Amazon Prime Day this year designed to coincide with the World Cup also was a factor.

Creative accounting on the part of some shippers also played a role in frontloading as they’ d accrue higher costs in the third quarter than the second quarter, thus enhancing second-quarter earnings, according to two shippers who asked not to be identified.

Higher travel costs, whether in the air or on the road, due to rising energy prices have also driven Americans to shift their spending back to physical things rather than experiences, argues Nerijus Poskus, vice president and head of global procurement at Flexport.

“ The substitution is showing up first in the categories closest to canceled vacation spending— home improvement, outdoor leisure, sporting goods, value retail,” Poskus said.“ Lead time from origin to shelf is between eight and 10 weeks, which is why retailers were loading inventory in May and June for July and August consumption.”

There’ s also a psychological factor to the frontloading, according to a senior ocean carrier executive who asked not to be identified. The source said once ship utilization surpasses 100 %, customers“ ask for more and more space” out of caution. And when the cargo from those panicked bookings isn’ t delivered to the dock, he said it forces another wave of blank sailings to adjust capacity to reduced demand.

The demand picture looked much different in early May. Then, Global Port Tracker, published monthly by the National Retail Federation and Hackett Associates, forecast that volume in May and June would be up 11 % and 8 %, respectively, year over year. Those comparisons are less impressive given that imports last spring plunged following the Trump administration’ s implementation of widespread tariffs that April.

While some forwarders bemoan that ocean carriers blanked too much capacity in May, carriers privately say trans-Pacific volume forecasts have gotten less accurate and so they’ ve redeployed vessels to other, more profitable, trades, namely Asia – Europe, Asia – Mediterranean, and South America. Those trades experienced an earlier sustained increase in spot rates. Indeed, in a reflection of diminished potential, opportunistic niche carriers pulled out the trans-Pacific months ago when rates there began sagging.

Port congestion in Asia and the dislocation of hundreds of thousands of containers due to the closure of the Strait of Hormuz have eaten up functional tonnage capacity and slowed the circulation of equipment, said Thorsten Meincke, executive vice president of ocean and air freight at Noatum Logistics, part of AD Ports Group. An increase in transshipment by the Gemini Cooperation alliance of Maersk and Hapag-Lloyd has also put more pressure on global ports, he said.“ We had three alliances and now we have four,” requiring more ships to be deployed, said Meincke, referring to Mediterranean Shipping Co. going without alliance partners but having the tonnage to match. MSC in the spring became the first container line to control 20 % of global capacity, according to maritime analyst Alphaliner.

And while the vessel order book and tonnage delivery from shipyards is accelerating, there’ s only so much tonnage available now. That’ s thanks to slow steaming due to higher fuel prices, diversions around the Red Sea and Hormuz, and port congestion. A mere 0.6 % of the global vessel fleet was idled as of May, while charter rates remain sustained, another sign of tight tonnage supply, according to Alphaliner.

The widening gulf between head-haul and back-haul cargo, particularly on Chinese trades, also requires more ship tonnage and equipment. One out of three containers shipped globally are empty compared to one out of four before the COVID-19 pandemic, according to Sea- Intelligence Maritime Analysis.

When that tightness of space meets unexpected volumes, price elasticity goes wild as container lines learned from the pandemic to go fast and hard on rate increases. One profitable quarter for an ocean carrier can make up for three weak quarters, and the yawning vessel order book promises overcapacity in the coming years, so fortune favors the aggressive.

email: mark. szakonyi @ spglobal. com

4 Journal of Commerce | July 6, 2026 www. joc. com