Muted Peak Season Ahead as Frontloading and Overcapacity Disrupt Market Dynamics
Ocean carriers’ attempts to raise rates on eastbound trans-Pacific shipments have been thwarted, as excess vessel capacity continues to outpace sagging demand. The planned General Rate Increase (GRI) for July 1 failed to gain traction, and Peak Season Surcharges (PSS) to the US West Coast were also pulled back, signaling a shaky outlook for the traditional shipping surge in Q3.
Despite aggressive frontloading by retailers ahead of expiring tariff reprieves, carriers are struggling to maintain pricing power. Spot rates from North Asia to the US have plunged — down 15% to the West Coast and 12% to the East Coast in just one week, according to Platts. While some fixed-rate accounts still carry modest PSS fees, many forwarders report being able to negotiate below-market FAK(Freight All Kinds) rates, with some FEUs moving below $4,000 to the East Coast and even under $2,000 to the West Coast.
Industry players point to the Trump administration's short-term tariff reprieves as the trigger for the frontloading frenzy earlier this year. As a result, July-to-October volumes are expected to fall short of previous years. “Last year, fall volumes were strong, but nobody expects the same this time,” said Christian Sur of Unique Logistics.
Adding to the downward pressure, capacity on the eastbound trans-Pacific route has surged. Data from eeSea shows July capacity hitting 1.57 million TEUs — the highest since 2021 — even with8.6% of sailings blanked. August capacity remains elevated at 1.48million TEUs, 10.6% above last year.
With too many ships chasing too little cargo, carriers are now in reactive mode. “Volumes are starting to go down and rates are falling because a lot of capacity was brought on,” said one carrier executive. Further blank sailings may be on the horizon if pricing erosion continues.
Still, not all is lost. Logistics insiders emphasize that some fall and holiday merchandise is still in the pipeline, and inventory replenishment will sustain baseline shipping demand. But the consensus is clear: 2025’s peak season will be anything but peak.
