The Merchant · n°152 · June 26, 2025

Cease-fire cools Hormuz threat—for now

🚢 Rates go every which way
⛽ A strait caught in an endless war
🏗 A new La Fontaine fable

Figure of the week

46,000 The number of kilograms of rare earths exported to the United States by China in May — a 93% drop compared to May 2024, following the export restrictions decided by Beijing. This figure explains why the United States reopened negotiations in mid-May, opening a truce in the tariff war triggered in April.

Quote of the week

“CONGRATULATIONS TO EVERYONE, IT IS TIME TO MAKE PEACE!” Donald Trump on his Truth Social network after announcing that the Iranian strikes on his Qatari base had caused no casualties.

The roller coaster continues for rates

The three major trade routes — Asia–United States, Asia–Europe and Europe–United States — have highly contrasting dynamics, reflecting the tensions and uncertainties that have built up over the past six months. The trans-Pacific route stands out for its extreme volatility: as of June 21, spot rates between Shanghai and Los Angeles, measured by the World Container Index (WCI), had fallen by nearly 20% since the beginning of June. This is a record drop since the index was created: for Lars Jensen, founder of Vespucci Maritime, the increases recorded since early June have thus been almost entirely erased. The Shanghai Containerized Freight Index (SCFI) confirms this trend. Toward the US East Coast, rates also fell by 18% last week. Again for Lars Jensen, we may be witnessing “the correction of an artificial surge linked to the extreme uncertainty around US tariff rules.”

By comparison, rates between Asia and Europe remain relatively stable. The SCFI index shows near-stagnation in prices between Shanghai and European ports. This quite logically underlines this route’s lower exposure to the upheavals of American policy — at least, not directly. Between Europe and the United States, rates remain high but are beginning to show signs of running out of steam: futures contracts for the US East Coast indicate that rates forecast for August are already below those of June. In other words, the market may have reached its seasonal peak earlier than expected.

Alongside the major maritime routes, it should be noted that geopolitics weighs heavily on other lanes. Rates are rising toward the Middle East. According to Xeneta, rates between Shanghai and the port of Jebel Ali (United Arab Emirates) jumped 55% in one month. This is obviously linked to the expansion of the conflict in the region. The war between Israel and Iran weighs heavily on carriers’ choices: Maersk announced it was temporarily suspending its calls at Haifa, while Hapag-Lloyd is adapting its service. Despite the announcement of a cease-fire, the region’s incredible geopolitical instability, coupled with the alliances in which regional players are caught up, could continue to weigh on prices in the coming weeks.

An endless war?

On Saturday night into Sunday, the United States carried out a series of strikes on the Iranian nuclear sites of Fordow, Natanz and Isfahan. Judging that Iran’s Monday response — missile fire toward one of the main American bases in Qatar — did not justify further escalation, Donald Trump announced that same evening a “complete and total” cease-fire between Iran and Israel, hailing on his Truth Social network the end of the “twelve-day war,” as he chose to rename it. A few hours later, the two countries accused each other of not having ceased their bombardments — a rare point of agreement between them, to the great anger of the American president. Barely born, was the cease-fire thus already dead? This new episode at least illustrates the extreme uncertainty into which the Middle East, and the world with it, is plunged.

Indeed, the American strikes had set the world buzzing with a fear: the closure of the Strait of Hormuz, which we already told you about last week. As you probably know, more than 20% of the world’s oil transits through there: it is a veritable energy artery of globalization. History nonetheless invited some perspective on the closure threats made by the Iranian Parliament during the day on Sunday: even at the height of the Iran-Iraq War (1980-1988), the strait was never completely closed. For Tehran, such a measure would be economically suicidal: 35% of its containerized traffic depends on transshipment via Gulf ports. Closure would affect its own exports as much as those of its adversaries. It would also strain its relations with its main ally, China, which is heavily dependent on the strait. As Anthony Gurnee, a former oil-industry executive, said about Iran’s strategy in the Strait of Hormuz: “It’s a means of leverage. Once the strait is closed, it’s worth nothing anymore.”

Even so. Even though the prospect of the strait’s closure was unlikely, the cease-fire announcement had reassured observers: the price of a barrel receded and Asian indices rebounded. The resumption of operations on Tuesday should therefore revive uncertainties, as the war already weighs heavily on freight professionals: marine insurance premiums have doubled in a week, reaching 0.5% of the vessel’s value. Some carriers are revising their shipping routes, which further complicates their task.

On a broader scale, and beyond market volatility, what worries most, in truth, is that non-compliance with the rules of international law is becoming the norm. Until now reserved for marginalized states like Iran, it is now widespread. The direct American intervention on Iranian soil, carried out without a UN mandate, ratifies a new world order, characterized by the unilateral use of force. This will inevitably have consequences for international trade.

Europe facing the new scourge of the century

“They did not all die, but all were stricken.” What Jean de La Fontaine says of the plague holds for the new scourge of the century: port congestion. It has become endemic in Asia, in the United States, but above all in Europe. And according to Luc Arnouts, vice-president of the port of Antwerp-Bruges, the situation should not improve “for many more months.” At Antwerp-Bruges, storage areas are at 100% capacity, with up to three days’ wait for container ships and trucking slots saturated from dawn. At Bremerhaven and Rotterdam, congestion reaches 85% and 80% of terminals respectively. Michael Aldwell, vice-president for maritime affairs at Kuehne + Nagel, points out that the crisis should spread to southern European ports: local importers have begun stocking up earlier than expected in anticipation of the year-end holidays.

The structural pressure is compounded by cyclical disruptions. The reshaping of shipping alliances since the beginning of the year has upended berthing plans and flow distribution. Labor tensions are also contributing to congestion: the port of Le Havre experienced numerous blockages in the spring; in May, a general strike paralyzed Antwerp-Bruges, and a new day of action is planned in Belgium today; and in Sweden, APM Terminals Gothenburg was hit by blockages on Monday, June 23 and Tuesday, June 24.

What solution? Hard to say, as Europe is not benefiting from the improvements in global punctuality in maritime freight (which rose from 51.4% to 58.7% between January and April). Luc Arnouts nonetheless raises one issue: the lack of transparency in the supply chain, which would prevent any effective coordination on a continental scale. He notes that “often, we don’t even know whether a container will go to Basel by barge or to Duisburg by truck.” A subject for the European legislator? It is in any case an essential question for logistics professionals.

👋 See you next week, The Merchant team

Sources

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