Peak Season Defies Analysts’ Predictions

This peak season was supposed to fizzle out early, supposing it would even really happen at all. In May and June, analysts were caught off guard by an early surge in shipping, pointed to as shippers front-loading to get ahead of a new round of tariffs. Then analysts determined that surge would undermine international shipping’s traditional peak season. In fact, analysts seemed convinced at the start of July that freight rates had reached their peak.

They hadn’t.

Freight rates have continued to rise, and we even saw more surging from freight rate index data that arrived late last week, such as what major maritime research company Drewry published on Thursday (September 3rd):

Spot rates from Shanghai to Los Angeles pushed up 5% to $7,185 per 40ft container, while those from Shanghai to New York increased 3% to $9,587 per 40ft container.

And don’t expect freight rates to drop this week either. Drewry continued with:

According to Drewry’s Container Capacity Insight, six blank sailings have been announced for the next week, twice as many as this week, indicating a decrease in capacity. With resilient demand and continued capacity management by carriers, Drewry expects freight rates to remain stable next week.

…

Geopolitical risks in the Middle East remain elevated, with continued attacks on commercial ships adding further disruption to the Strait of Hormuz. Chinese ports remain constrained as Typhoon Saudel struck the country, adding to elevated congestion following a series of recent typhoons. Meanwhile, Panama Canal drought restrictions are limiting capacity to 34 daily transits in early September and 32 later in the month, with Neo-Panamax capacity capped at nine slots per day.

Where Is the Demand Coming From?

This is the time of year when demand is typically higher with shippers stocking up for the holiday season. But if there was heavy front-loading, shouldn’t that demand have been cut into?

What’s interesting is Universal Cargo’s own data hasn’t really shown an early demand surge nor a big peak season shipping increase. Shipping numbers have been fairly steady, feeling like there hasn’t been an actual peak season at all.

Universal Cargo’s internal file and container count numbers usually serve as a good barometer for what’s happening with demand in the international shipping industry. I realize those numbers are just anecdotal, but over the last decade plus, they’ve matched up well with reported demand in the industry. However, this year has been an outlier.

International shipping news outlets have been reporting robust demand for several months. As alluded to, Universal Cargo’s numbers haven’t fallen off a cliff, but the surges in file and container counts have not taken place to match the reported demand surges in the industry.

Universal Cargo is a smaller freight forwarder that serves small to medium U.S. importers and exporters. This leads me to believe the demand in the industry has been coming mainly from large shippers – the Walmarts, Home Depots, IKEAs, and Nikes of the world – rather than the small to medium importers.

Likewise, large importers are the ones who’ve reportedly claimed and received the vast majority of tariff refunds, while many small to medium importers have struggled with the recovery process. This influx of funds from shipping costs for large importers likely increased their spending on imports through this period while the smaller importers didn’t see cash flow increases.

Other Factors Bolstering Freight Rates

Meanwhile, congestion at Asian ports, continued hostilities in the Persian Gulf, and artificial capacity control from carriers like blank (cancelled) sailings help keep freight rates elevated.

There is an influx of capacity going into the international shipping market at the moment. New ships will continue to be introduced through the rest of the year and 2027. With that, you can expect carriers to continue with blank (cancelled) sailings to avoid overcapacity putting strong downward pressure on freight rates.

It may be difficult for carriers to keep that downward pressure at bay next year, but they’ve managed to keep freight rates at a healthy level for themselves through the international shipping peak season so far, despite all the reports of its early start and analysts’ predictions of its early demise.

At this point, I would expect carriers to be able to hold on to their higher freight rates through September and into October. Hostilities in the Strait of Hormuz with the Iran War don’t look too likely to end in that time, and congestion at Asian ports also seems unlikely to resolve by month’s end as congestion is starting to be considered a structural issue.

In the end, 2026’s peak season is looking like peak season when it comes to freight rates. Overall demand doesn’t seem all that atypical either, though it does seem bloated by the big shippers at the top rather than from the small to medium shippers who usually bolster the spot rate market too. Perhaps the analyst’s would have been right about freight rates reaching their peak a couple months ago if demand was determined by the shipping of small to medium shippers. But as it is, peak season is defying analysts’ prediction.