Pegasus Market Update Q2 2025: No.21

All,

Quick market summary entering what will be a very tumultuous summer -

Global demand is pivoting sharply toward the Asia-U.S. corridor as the 90-day U.S.–China tariff reprieve drives front-loaded orders and carriers rush to monetize tightening space.

The ripple effects—steep spot-rate hikes, selective capacity redeployments, and renewed fears of West Coast congestion—are already visible and will define bookings through the July peak.

Sea-Intelligence released reliability data for April. Global reliability continued to increase slowly and is now at just below 59%, which is the best seen since November 2023. This will be a much different number (worse) for the second quarter.

In short, the trifecta of operational issues - space shortage, port congestion, and equipment shortage is upon us; this means a lot of difficulty in movement and expense even without any tariff adjustments.

Transpacific Update

Rates & Surcharges

• Major carriers pushed through 1 June GRIs, raising spot quotations on both coasts; however, levels continue to be re-benchmarked roughly every two weeks.
• Premium add-ons (PSS, equipment guarantees) frequently exceed base FAK, but in early June, the market character is still more space-driven than rate-driven. Confirm allocations first, then price.
• Additional price hikes are slated for Mid-June, depending on the carrier, and they are quite large (see attached)

Capacity Shifts & Extra Loaders

• Blank-sailing programs persist in parallel to defend June GRIs, so effective supply remains finely balanced.
• Inland China depots (Chongqing, Chengdu, Wuhan) still report 20–30 % shortages of 40 HCs—SOC boxes or alternative origins can mitigate gaps.
• New Carriers and a few extra loaders have come into the market to take advantage of the higher rate levels - it remains to be seen how this might affect the market longer term.

Port & Landside Congestion

• Berth waits already stretch to 10–11 days at Los Angeles/Long Beach; East Coast gateways post 7–8 days, with chassis availability the tightest since 2022.
• Import rush is expected to pull LA/LB throughput down 30 % immediately after the tariff window closes, risking whipsaw swings in labour scheduling and dwell times.
• Terminal operators warn that any further vessel bunching could recreate 2021-style street-turn delays and peak-season demurrage spikes.

Shipper Playbook for June–July

• Book two–four weeks ahead and secure premium options where transit time is critical—extra loaders mean June space is available, but will fill quickly once allocations open.
• Build liberal lead-time buffers and pre-clear cargo where possible to bypass inland rail slow-downs linked to chassis/driver shortages.
• Diversify gateways—e.g., Tacoma, Oakland, or Houston—to spread congestion exposure, even if base rates are marginally higher.
• Position inventory ahead of the 14 August tariff snap-back; late-July sailings may arrive too late to clear customs before duties revert.

With GRIs locked in and premium space fully committed through week 28, the Trans-Pacific will remain space-driven at least until mid-July. Any slippage in port performance, whether labour-related or weather-related

—could exacerbate delays and push spot prices beyond current forecasts.

Tariff Updates

Sandler, Travis & Rosenberg, P.A. (ST&R) has provided this overview of the following actions that have taken place since the May 28 Court of International Trade (CIT) opinion invalidating the IEEPA tariffs.

1. CIT rendered its decision that the IEEPA tariffs were unlawful.
2. CIT issued an order that the IEEPA tariffs and executive orders, and amendments were to be declared invalid and that they be revoked, and that the government has 10 calendar days (until June 7) to effectuate the order.
3. The Government filed an appeal to the Court of Appeals in the Federal Circuit (CAFC).
4. The Government filed a motion at the CAFC to stay the CIT order for at least 7 days to allow the CAFC and, if necessary, the Supreme Court to consider their longer-term request.
5. The CAFC granted the Government’s request to stay the CIT order (hold off on revoking the Executive Orders) until they have time to consider their request for the longer term.
6. The District Court issued its decision that the IEEPA is not a law providing for tariffs and therefore the CIT does not have jurisdiction, and granted the preliminary injunction requested for the two plaintiffs only (not all importers).
7. The District Court held off on issuing its order for 14 days, allowing the Government to file an appeal.

So, what does all the above mean to importers and their customs brokers?

Tariffs: For the time being, tariffs will remain in place. The appeals court ordered that no action be taken until they have had time to consider the request to stay the order for the long term. So, it is a temporary stay, pending further consideration for a long-term suspension once the parties have both offered their position to the court. Meanwhile, you pay tariffs.

Jurisdiction: Right now, we have two courts that have decided they have jurisdiction to decide the cases. We must wait to see whether the CIT ultimately has jurisdiction and we follow its orders, or if the District Court has jurisdiction and we follow its orders.

Refunds: It is possible that at the end of the day, importers will be eligible for refunds equivalent to the duties paid variously for the IEEPA Fentanyl, the IEEPA Fentanyl and Border, and the IEEPA Reciprocal tariffs retroactive to the first day of application (either Feb. 4 or April 5). However, until all the court issues are straightened out, you cannot correct your entries using a post summary correction – PSC - or file entries without the IEEPA tariffs - and it may not get sorted out until after the entries liquidate – at which time you will need to file protests to protect those entries and keep them open for when the courts have settled the issue.

Action: Importers should track all entries for which any IEEPA tariffs were paid, including the expected liquidation date and the last day to file a protest (180 days from liquidation). As the case progresses, we will then know for which entries to either file a PSC, if the shipment is not liquidated, or to file a protest if it is liquidated. This data will also provide you with an expectation of potential refunds. Note that EVERYONE will be seeking refunds if the Executive Orders are eventually cancelled, so set expectations for how timely any eventual refunds with interest will be paid to you. It would not be unreasonable to expect refunds, if any, to not come until later in 2026 or even in 2027.

As you can clearly see, the tariff issue is very dynamic and constantly changing, but rest assured, we are here for you to answer your questions.

Pakistan/India Tensions

We would like to bring to your attention that carriers are currently facing an exceptionally high booking load in the lead-up to the Eid holidays. As a result, major shipping lines—including Maersk, Hapag-Lloyd, CMA CGM, COSCO, and MSC—are all reporting significant rollover situations. Even containers that were gated in on time have, in many cases, been rolled over to next week’s vessels.

This situation has led to increased congestion at both Port Qasim and Karachi Port. Compounding the issue is an ongoing shortage of containers and equipment, making it increasingly difficult to secure empty units in a timely manner. These combined challenges are unfortunately causing delays across the board.

Author
Matthew Crocker
Chief Commercial Officer