Did You Know That…

 

…Tentative Strait of Hormuz transits continue despite Iranian closure and toll threats.

• US could charge tolls on Strait of Hormuz for ‘Guardian Angel’ service, threatens Trump in response to Iran’s insurance-and-toll scheme

• Multiple vessels alter course or abort transits amid Strait of Hormuz uncertainty, underscoring the immediate operational impact of Iran’s closure announcement and routing demands

• The strait remains a high-risk zone, with war risk premiums, operational delays and diplomatic uncertainty expected to persist as US-Iran ceasefire talks proceed amid escalating maritime tensions.

Ships continued transiting the Strait of Hormuz over the weekend despite Iran’s renewed claims it had closed the waterway and would act against non-compliant vessels.

…Iran imposes mandatory insurance on ships transiting Strait of Hormuz, with fees likely to follow.

• Iran’s Persian Gulf Strait Authority is imposing mandatory, Iran‑approved insurance for all ships using the Strait of Hormuz — free for 60 days, but with fees likely afterward

• The move challenges a US-Iran agreement guaranteeing toll‑free passage

• Iran demands vessels use its preferred northern route, with threats of penalties for non‑compliance

• Shipowners, MEG states and IMO warn the policy could destabilize transit norms, while US officials emphasize keeping the strait open as negotiations continue on a long‑term framework.

Iran has asserted its control over the Strait of Hormuz, insisting that vessels comply with new terms and conditions to transit, including mandatory Iranian insurance for all vessels.

…VLCC rates spike yet again as ‘confusion continues to reign’ at Strait of Hormuz.

• Baltic Exchange’s West Africa-China VLCC index rose to $188,957 per day on Monday, up 92% week on week to the highest level since March 10

• US Gulf-China VLCC index increased to $154,987 per day, up 46% week on week to the highest assessment since April 2

• Oman-China VLCC index rose to Worldscale 276, up 82% week on week to the highest level since the index was introduced on March 24.

The Strait of Hormuz isn’t open yet, but the chance that it might be soon — even if it’s a partial reopening — is a magnet for VLCC tonnage, pumping up spot rates at other loading ports around the globe.

…Hormuz traffic is up, but confusion reigns over the strait and tolls remain on the table.

• Strait of Hormuz transits jumped after the partial reopening, but traffic is split between rival Iranian and US-backed routes, creating widespread operational confusion

• Iran and Oman continue to challenge US claims the strait will remain toll-free, keeping the prospect of paid passage alive

• A wave of ballasting VLCCs is now diverting toward the Middle East, with many vessels gathering off Oman awaiting clearance to transit the strait.

Traffic through the Strait of Hormuz has surged after a partial reopening, but shipowners face a chaotic two-route system and renewed uncertainty as Iran, Oman and the US clash over control — while the prospect of tolls refuses to die.

`…Our good friend Steven Yuan of FS International China shared a fresh marketing report:

1. General Rate Announcement. Last week, several major shipping lines jointly announced substantial rate increases for European services, effective 1 July. Among them, CMA CGM and Maersk have each issued Peak Season Surcharge (PSS) notifications, with increments of USD 500 / 1,000 / 1,000 per container (depending on equipment type). The market is currently witnessing a concurrent rise in both freight rates and shipment volumes.

2. Trade Volume Indicators. According to data released by the General Administration of Customs of China, the country’s merchandise exports in May (in USD terms) grew by 19.4% year‑on‑year, marking the highest growth rate in nearly three months. This robust export performance has further intensified demand for container shipping capacity.

3. Key Drivers Behind the Rate Surge. The sharp escalation in freight rates can be attributed to three interrelated factors:

• Disruption of Empty Container Repositioning
  Widespread route diversions and worsening port congestion have stranded hundreds of thousands of containers at overseas terminals, severely impeding their timely return. As a result, the global repositioning of empty equipment has come to a near standstill. Major Chinese load ports – including Shanghai, Ningbo, and Shenzhen – have once again fallen into a vicious cycle characterised by “cargo waiting for containers, containers waiting for vessel space, and frequent rollovers”.

• Accelerated Front‑Loading Leading to Demand Surge
  Amid rising geopolitical tensions and growing uncertainty over international trade policies, importers in Europe and the United States are highly concerned about potential supply chain disruptions. To mitigate risks, they have brought forward their traditional peak‑season inventory builds (normally for Christmas and Black Friday) to as early as May–July, with reduced price sensitivity. This concentrated wave of pre‑peak demand has overwhelmed the already fragile vessel capacity available during the summer months.

• Carrier Pricing Power in an Oligopolistic Market
  The container shipping sector remains highly concentrated among a few major alliances, forming an oligopolistic structure. In response to the capacity void created by geopolitical conflicts, port congestion, and equipment shortages, the dominant carriers – leveraging their substantial pricing power – have coordinated their strategies. Through successive steep PSS hikes and general rate increases (GRI/FAK), they have collectively pushed the market upward.

4. Developments on Other Trade Lanes. On the US and South America routes, rate increases during May and June were even more pronounced than those on the European lane. However, recent indicators suggest that both these corridors may have reached an inflection point, with prices likely to begin softening from July onwards.

5. European Lane – Near‑Term Outlook. We have observed tentative signs of easing in European freight rates over the past few days, with several carriers beginning to offer spot rate. It is highly probable that European rates are approaching a turning point, and a downward correction is increasingly anticipated.

Below is the update rate fyr. As you know space is tight so it is subject to space. Each quotation need to be confirmed separately with the local office on a case-by-case basis.

 

…Regrets, they’ve had a few. Ten years on, how the Brexit vote changed Britain. In many small ways, and mostly for the worse. At 12.15am on June 24th 2016, Sunderland became the poster child for Brexit. The port on England’s north-eastern coast was the first city to declare that it had voted to leave the European Union. Over 60% of Sunderland’s inhabitants wanted out, despite veiled warnings from Nissan that Brexit might cause it to close its car factory (a major local employer). As a working-class area whose shipbuilding glory days were long gone, the port came to embody left-behind Britain’s desire to give global elites a bloody nose. Economists try to quantify the damage from Brexit. Some say GDP per person is 8% lower than it could have been; others say 2.5%. Growth in most other G7 economies has been faster (see chart 1). In Sunderland Remain’s worst economic fears did not come to pass (the Nissan factory limps on) but leaving has quickened the decline of British manufacturing (the plant now produces 46% fewer cars). Sunderland has not become a deregulated Singapore-on-the-Wear. Brexit has brought myriad day-to-day annoyances. Dominic Gardner, who runs a road-repair business in Sunderland, finds it harder to import parts. The paperwork is “phenomenally frustrating”. His colleague Mike complains about long passport queues when on holiday. (Mike’s Polish neighbour is “laughing” because he “goes straight through security”.) From exporting cheese to taking your dog abroad, life in Brexit Britain is simply harder.

…A sucky business. Strange new EV-makers keep appearing in China. If you can make a robo-vacuum, you can make a car. Next year Dreame, a Chinese business better known for its robo-vacuums, plans to start selling sleek electric vehicles (EVs). It is not the only firm branching out from small household appliances to machines that can carry an entire household. Rox Motor, which started selling electric SUVs in 2023, was also founded by a vacuum tycoon. Xiaomi, which made its name producing cheap smartphones (and makes vacuums, among other things), began selling sports cars a year later. Perhaps more surprising is that there are new entrants to the crowded Chinese EV market at all. At least 143 EV brands sold at least one car last year. But 46 of them did not sell more than 1,000, according to AlixPartners, an advisory firm. Even so, 23 new EV brands were launched while just nine were halted. Admittedly, lots of these are “sub-brands”, created by big companies to differentiate their high-end rides from mass-market models. Geely, China’s third-largest carmaker by sales, has a portfolio of more than ten brands, including Zeekr, Polestar and Lynk & Co. Only ten Chinese companies managed to sell at least 1m cars apiece in 2025, accounting for 84% of the total. However, that share was down slightly from the year before, suggesting that the consolidation of China’s EV market that industry insiders have long predicted is yet to take place. Only occasionally does an entire company collapse. Hozon Auto, which made the Neta EV brand, is in the process of doing so. It suddenly stopped paying many of its employees last year and attracted headlines when angry staff cornered the founder at his Shanghai office demanding their wages.

…Undersigned visited the missing Mercosur countries in South America, and we expect to share positive announcements regarding reliable, new associates in Uruguay, Paraguay, and Bolivia soon.

…"Success is the sum of small efforts, repeated day in and day out." A simple reminder that consistent progress often matters more than dramatic breakthroughs. Even a small step taken every day can lead to meaningful results over time.

Have a great week!

 

…This DYKT news bulletin will be published on the website as well, go to www.eaanetwork.com.