Global manufacturing logged an eleventh straight month of expansion in June, though growth is easing. AI and semiconductor demand stays strong out of Taiwan and Korea while consumer and e-commerce volumes soften. Ocean peak season is opening even as tariff-driven frontloading unwinds and rates come off their July highs, while the closure of the Strait of Hormuz, a Houthi blockade of Bab el-Mandeb and incoming US Section 301 duties keep fuel, routing and tariff costs volatile.
Air Outlook
- The EU’s removal of its de minimis exemption on July 1 has pulled European airfreight capacity down sharply as carriers withdraw freighters; rates have dropped with demand, and the traditional summer low is expected to hold the pattern through August.
- Taiwan exports to the US continue to climb on sustained AI and semiconductor demand, while US-bound volumes from China and the rest of Asia remain comparatively soft.
- Asia-Pacific demand has eased from Q2 with capacity holding steady; intra-Asia rates are slightly lower but remain above the same period last year.
- Taiwan, South Korea, Malaysia, Thailand and Singapore remain the tightest airfreight markets, especially on US and Europe lanes.
- Middle East disruption remains contained for air so far, though longer routings, monsoon and typhoon weather, and heatwave payload restrictions at Transpacific hubs add friction; renewed fuel-price pass-through is the key watch item.
Ocean Freight Outlook
- The last-minute cargo rush ahead of US tariff deadlines is slowing into August, and transpacific rates have turned down from July highs even as peak-season replenishment keeps vessel space tight at major gateways including LAX/LGB, NY/NJ, Savannah and Seattle.
- Peak season is tightening space to Europe and North America across Asia, with carriers layering in peak season surcharges and GRIs; secure space 1-2 weeks ahead for intra-Asia and 2-3 weeks for Europe and North America.
- Korea’s tariff-driven frontloading pushed rates to a two-year high; they have peaked and are gradually declining, with Europe expected to follow.
- The Hormuz situation keeps fuel-related costs elevated, and low Panama Canal water levels may bring additional surcharges and capacity limits into August.
- Intra-Asia stays stable on ample capacity and strong carrier competition, while Greater China runs softer with US-lane rates falling.
“The frontloading wave has passed its peak – transpacific rates are coming off their highs and Europe looks set to follow. But the cost floor isn’t moving fuel and canal surcharges won’t fall with demand, so expect cheaper space, not cheaper shipping.”
Trade & Supply Chain Watch
- The Strait of Hormuz remains effectively closed and the Houthis have declared a blockade of Bab el-Mandeb; some carriers are rerouting via the Cape of Good Hope, adding 12-15 days, while war-risk premiums and fuel surcharges climb.
- US Section 301 duties are set to replace the expiring global import surcharge, covering 60-plus trading partners including Vietnam, Thailand and India with no expiry date; shippers should review classifications and scenario-plan Asia-origin landed costs.
- A bipartisan Russia sanctions bill with White House backing would impose 100% tariffs on the largest buyers of Russian oil, including China and India, adding further impetus to supply chain diversification.
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“What we’re seeing is a market split in two. AI demand out of Taiwan just keeps climbing, while the e-commerce base that carried Europe is gone with the de minimis change.”
VP, Global Sales and Marketing, Dimerco Express Group