Chart of the Week: Inbound Ocean TEUs Index – USA SONAR: IOTI.USA
The Inbound Ocean TEUs Volume Index (IOTI), which measures bookings of twenty-foot equivalent containers by departure date, has been holding near annual highs for nearly a month. While tariffs are possibly a factor in this seasonally early push, there may be more driving this wave than tariff concerns alone.
The IOTI is down compared to the previous two years, but this shouldn’t be taken as a sign of economic sluggishness. Concerns over service due to the Red Sea closures in 2024 and erratic tariff implementation in 2025 make evaluating those years from a pure demand perspective challenging. This year isn’t without its own nuances, but it’s possibly the most “normal” we’ve seen since before COVID.
A quick recap on tariffs
On February 20, 2026, the Supreme Court ruled that IEEPA does not authorize the president to impose tariffs, invalidating the April 2025 “Liberation Day” reciprocal tariffs as well as the fentanyl-related tariffs on China, Mexico, and Canada. The administration has since issued roughly $20 billion in refunds tied to those tariffs. In response, it pivoted to other legal authorities.
The administration invoked Section 122 of the Trade Act of 1974 to impose a 10% across-the-board surcharge on goods from nearly all countries for 150 days. On May 7, 2026, the Court of International Trade ruled against these tariffs as well, though the decision is under appeal and the tariffs continue to be collected. This surcharge is set to expire July 24, 2026, unless Congress extends it.
Since Section 122 is expiring and courts have been unfriendly to IEEPA-based tariffs, the administration has moved to reconstruct the tariff wall through expanded use of Sections 301 and 232. The forced-labor Section 301 investigation, covering 60 economies (nearly all US imports), proposes tariffs of up to 12.5% and is not yet in effect; USTR held its public hearing on the matter this past week.
USTR will now review the hearing record and decide whether to finalize, modify, or drop the proposed tariffs. There are nuances throughout, especially involving the EU. For freight purposes, July 24 is the date that matters most, since that’s likely when there will be some clarity on what the policy will actually be.
What this means for freight
The average transit time from China to the major West Coast US ports is around or just over two weeks. This means many of the imports departing last week will be landing right around the time of the section 122 expiration. This suggests that orders should start waning in the coming weeks.
The Ocean Booking Volume Index, which measures both new and amended booking activity by submission date (rather than departure date, like the IOTI), showed a flurry of increased activity over the past two weeks. This supports the case that many shippers were trying to get ahead of new duties.
Most container bookings occur within a week of expected departure, and those volumes appear to have peaked this past week. However, there’s still a bulge of orders scheduled 2 to 4 weeks out, suggesting tariffs aren’t the only factor behind the rise in bookings. For instance, orders with a 21-day lead time (yellow) peak around July 21, while orders with a 28-day lead time (pink) peak on July 28. This suggests many shippers are simply restocking or preparing as they typically would for upcoming demand.
On this past week’s episode of Freightonomics, Dr. Zac Rogers, co-author of the Logistics Managers’ Index, said it does appear that many shippers have been caught off guard by consumer resilience. Many economists had expected a more challenging economy earlier in the year due to inflation that never fully materialized.
He noted that retailers were concerned consumers wouldn’t show up after gas prices spiked the way they did in March 2022. Manufacturers and upstream firms, meanwhile, were more worried about not having the components they’d need later in the year, or facing much higher costs, so they ordered early.
This suggests we may be looking at a longer but less pronounced peak-ordering cycle for maritime freight, and that many firms may be growing more bullish about the second half. If maritime demand continues to show strength into August, it will point to a strengthening in goods demand that could catch many businesses off guard and further strain transportation capacity.
About the Chart of the Week
The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.
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Facts Only
* The Inbound Ocean TEUs Volume Index (IOTI) has been near annual highs for nearly a month.
* The IOTI measures bookings of twenty-foot equivalent containers by departure date.
* Tariffs are possibly a factor in the current booking push, but other factors may be more influential.
* The IOTI is down compared to the previous two years.
* Concerns over Red Sea closures and 2025 tariff implementation complicate evaluating demand from a pure perspective.
* A Supreme Court ruling on February 20, 2026, invalidated certain reciprocal tariffs.
* The administration invoked Section 122 of the Trade Act of 1974 to impose a 10% surcharge on goods from nearly all countries for 150 days.
* The Court of International Trade ruled against these tariffs on May 7, 2026, though the decision is under appeal and tariffs continue to be collected.
* The administration moved to reconstruct the tariff wall using Sections 301 and 232 following the expiration of Section 122.
* The forced-labor Section 301 investigation covers 60 economies and proposes tariffs up to 12.5%.
* The average transit time from China to major West Coast US ports is around two weeks.
* Ocean Booking Volume Index showed increased activity over the past two weeks.
* Most container bookings occur within a week of expected departure, with volumes peaking recently.
* Orders scheduled 2 to 4 weeks out exist, such as a 21-day lead time peak around July 21 and a 28-day lead time peak on July 28.
Executive Summary
The Inbound Ocean TEUs Volume Index (IOTI), which tracks twenty-foot equivalent container bookings by departure date, has maintained near annual highs for nearly a month. While tariffs may influence this trend, other factors are also at play. The IOTI shows a decrease compared to the previous two years, but this does not necessarily indicate economic sluggishness, as concerns over past and future tariff implementation make direct demand evaluation challenging.
The recent booking activity reflects shippers attempting to anticipate duty changes, as indicated by increased activity in the Ocean Booking Volume Index over the past two weeks. Most container bookings occur within a week of the expected departure date, with volumes peaking in the most recent week. However, there remains a significant volume of orders scheduled two to four weeks out, suggesting that routine restocking or preparation cycles are also contributing to booking trends beyond immediate tariff concerns.
Expert commentary suggests that consumer resilience has influenced ordering patterns. Retailers were concerned about consumer behavior following inflation spikes, while manufacturers and upstream firms ordered early due to worries about future component availability and cost increases. This points toward a potential peak-ordering cycle that may be longer than anticipated, with some indicators suggesting continued strength in goods demand into the second half of the year.
Full Take
The narrative surrounding the recent surge in maritime booking activity is layered by immediate regulatory uncertainty and underlying economic resilience. The fluctuation in the IOTI, despite tariff discussions, suggests that demand drivers are multifaceted. The observation that bookings for longer lead times still peak within a typical cycle indicates a pattern where shippers engage in routine inventory management rather than solely reacting to imminent policy shifts. This implies that operational inertia—the need to restock or plan ahead—acts as a persistent force on freight volume, buffering against sharp, short-term volatility.
The discussion around tariffs reveals a shifting legal and administrative strategy for trade policy, moving from direct tariff imposition via IEEPA to using broader trade statutes like Sections 301 and 232. This evolution demonstrates a systemic response to judicial resistance against executive action, where the mechanism of enforcement is constantly being re-evaluated. The fact that specific dates, such as July 24th, are highlighted as critical inflection points suggests that market perception hinges on when policy clarity is achieved, creating temporal pressure for commercial decisions.
The insight from Dr. Rogers regarding consumer and manufacturer behavior points toward a delayed but sustained bullishness in maritime demand. If the observed ordering patterns reflect cautious anticipation rather than panic buying, then the potential strain on capacity may materialize later than immediate market noise suggests. The underlying pattern is one where external shocks (like economic uncertainty or geopolitical risks) are filtered through established operational routines, leading to predictable, albeit delayed, shifts in freight flows. What is not fully accounted for is the impact of this cautious cycle on the broader supply chain's ability to absorb future capacity demands when certainty finally settles.
Sentinel — Human
The text reads like expert analysis synthesizing complex trade policy shifts with current maritime booking trends, exhibiting high fidelity to specific, evolving data points.