Tariff Expectations Push Container Rates to Two-Year Highs

2026 was widely expected to be a quiet year for container shipping, but events are proving the forecasts wrong. Containerized freight rates are approaching two-year highs, driven upwards by tariff expectations, limited capacity and the impact of the U.S.-Iranian war.

This week, the Drewry World Container Index neared the $4,200 per FEU level, driven upward 40 percent year-over-year thanks to strong demand from American importers and strong ex-China bookings. The SCFI has more than doubled compared to rates seen last year.

Part of the cause is the expectation of soon-to-come tariff hikes. After the Supreme Court struck down the White House's International Emergency Economic Powers Act (IEEPA) tariff rates earlier this year, the administration used a separate set of legal authorities - Section 122 - to impose blanket import tariffs of 15 percent on all nations. The Section 122 tariffs expire at the end of July, and President Donald Trump is widely expected to announce additional new tariffs to replace them. That prediction is proving accurate: on Friday, he threatened import duties of 100 percent on any nation that collects taxes on the overseas revenues of U.S. tech companies, taking aim at European plans for a digital services tax.

"The section 122 tariffs will expire on July 24th and it is not yet known which new tariffs, likely from the Section 301 investigations, will supersede them," commented freight market expert Lars Jensen in a LinkedIn post.

For importers, the current 15 percent baseline tariff under Section 122 appears favorable, as it is equal to or less than the IEEPA rates in effect last year - and likely better than what might be available in several months' time, forwarders and BCOs told the Wall Street Journal. To take advantage of current tariff rates, bookings for the annual holiday season imports are getting moved up, and freight rates are increasing accordingly. The benchmark Shanghai-LA box rate is up 12 percent this week alone, according to Drewry, reaching $5,750 per forty-foot container. Southeast Asia-USWC rates have also soared abruptly, a welcome reprieve for ocean carriers.

It may be a short-lived bump, according to Jensen. Container spot rate futures on the NYFI index suggest that investors expect a substantial drop from the current heights within just a month's time, Jensen noted - aligned with the expected imposition of new tariff rates.