As the echoes of Amazon Prime Day's success still resonate, cross-border e-commerce sellers are detecting a different scent in the air—rising costs. This isn't alarmist speculation but a tangible reality, with major shipping companies already issuing August rate adjustment notices, signaling that the challenges of peak season inventory preparation have only just begun.
Major Carriers Announce Widespread Rate Increases Across Key Routes
Several shipping giants have recently announced freight rate adjustments for August, affecting multiple critical routes. Cross-border sellers must pay close attention and prepare accordingly.
- Maersk: Effective July 31, FAK rates (Freight All Kinds) from major Asian ports to Mediterranean ports will increase significantly—20-foot containers to $1,850-$2,750 and 40-foot containers to $2,300-$3,600. Rates to Northern European hubs (Rotterdam, Felixstowe, and Gdansk) will rise to $1,025 per 20-foot container and $1,900 per 40-foot container, representing increases of 30% and 50% respectively—the first notable hike on European routes this year. Rates from Northeast Asia to Australia will also increase by $300 for 20-foot containers and $600 for 40-foot containers.
- CMA CGM: Starting August 1, FAK rates from all Asian ports (including Japan, Southeast Asia, and Bangladesh) to all Northern European ports (including UK and full coverage from Portugal to Finland/Estonia) will increase to $1,075 per 20-foot dry container and $1,950 per 40-foot dry/reefer container.
- MSC: New rates from India and Pakistan to Antwerp and Valencia will take effect August 7 through August 31.
- Hapag-Lloyd: Rates from Pakistan, India, and Bangladesh to Northern and Southern Europe will increase starting August 6 until further notice.
Additionally, MSC and HMM have announced peak season surcharges. MSC will implement these surcharges for Asia-to-US/Canada shipments starting August 21, further increasing costs for cross-border sellers.
West Coast Rates Approach $2,000 as Peak Season Demand Intensifies
Following Prime Day and with major sales events like the Prime Day Fall Sale and Black Friday approaching, the industry has entered its traditional inventory preparation period. Rising demand has directly driven shipping costs upward.
Drewry's latest data shows that Shanghai-to-Los Angeles rates have surged 10% in a single week, reaching $1,965/FEU—nearing the $2,000 threshold—with a cumulative increase of 24.3%. Similarly, Shanghai-to-New York rates rose 7% to $2,906/FEU. These increases significantly pressure sellers' profit margins on key routes.
Capacity Reductions Exacerbate Price Hikes
Shipping companies have implemented various measures—including canceled sailings, port omissions, and vessel downsizing—to mitigate losses, resulting in reduced capacity that further fuels rate increases.
Data indicates that between weeks 30 (July 23-30) and 34 (August 21-27), carriers canceled 40 sailings across major east-west trades—representing 4% of scheduled voyages. While this percentage may seem modest, the capacity crunch becomes critical during peak season preparations.
Industry analysts suggest these capacity management strategies serve dual purposes: addressing underperforming vessel profitability while maintaining long-term revenue stability—indicating that cross-border sellers may face persistent challenges from carrier pricing strategies.
Last-Mile Delivery Costs Rise Despite Averted UPS Strike
Beyond ocean freight increases, sellers also face higher last-mile delivery costs. Although UPS and the Teamsters union reached a tentative agreement on July 25, averting a potential strike, the new contract—pending ratification by 340,000 workers through August 22—will likely bring at least an 8% general rate increase. With fuel surcharges and additional fees, competitors like FedEx may follow suit, compounding delivery cost pressures.
Strategies for Cross-Border Sellers
To navigate these challenges, sellers must implement proactive measures:
- Advance Planning: Prepare inventory early to avoid peak rate periods while maintaining optimal stock levels.
- Supply Chain Optimization: Partner with competitive logistics providers, optimize routes, and consider multimodal solutions.
- Product Value Enhancement: Improve product quality, design, and branding to justify higher pricing.
- Pricing Strategy Adjustments: Carefully recalibrate prices to offset costs without sacrificing sales volume.
- Sales Channel Diversification: Expand beyond marketplaces to independent sites and social commerce platforms.
- Cost Management: Tighten control over procurement, operations, and marketing expenses.
The coming peak season presents a critical test for cross-border sellers' supply chain resilience. Only through strategic preparation and adaptive responses can businesses maintain profitability amid these mounting freight cost pressures.