Container Rates Slide as Capacity Grows, Tariff Uncertainty Persists

Container shipping rates on the critical Asia-to-U.S. lanes are trending downwards, following a July spike driven by shippers who pulled imports forward to avoid higher tariffs.

According to consultant Freightos, the recently announced 90-day extension of the China–U.S. tariff truce into November is unlikely to trigger another import rush. The pause in tariffs isn’t solely about trade negotiations—sources told FreightWaves that U.S. Customs and Border Protection’s IT systems have struggled to keep up with the complex reporting demands created by shifting U.S. tariff policies.

“Many goods that were slated for tariff relief are still being taxed, as implementation conditions remain unresolved or deal details are still being finalized,” said Judah Levine, head of research at Freightos. “These delays mean it will take time before any tariff adjustments show an effect on freight demand and rates.”

Levine noted that trans-Pacific container arrivals likely peaked in July as importers rushed shipments ahead of the early August tariff deadline. Since then, Asia–North America spot rates have plunged by 60–70% in a steady decline. Last week, rates to the U.S. West Coast fell 10% to $1,744 per forty-foot equivalent unit (FEU), their lowest since December 2023. East Coast prices dropped 21% to $2,733 per FEU, down 34% in August.

Although a senior Chinese trade official is expected to visit Washington, growing vessel capacity is putting additional pressure on rates. Carriers are also beginning to redeploy vessels away from U.S. services to sidestep new U.S. port charges on China-linked ships set to begin in October.

The Premier Alliance—Hyundai Merchant Marine, Ocean Network Express (ONE), and Yang Ming—will split its Mediterranean Pacific South 2 (MS2) pendulum service into two separate routes: Asia–Mediterranean (MD2) and Middle East Gulf–U.S. Gulf Pacific South 2 (GS2). The change could remove up to 10 Chinese-built vessels from U.S. trades.

The new U.S. port charges start at $50 per net ton for Chinese-owned and -operated ships, and $18 per ton for non-Chinese operators using Chinese-built ships, with rates increasing over time. Exemptions apply for empty ships calling to load agricultural or bulk exports.

Meanwhile, Freightos reported that trans-Atlantic rates remained stable last week at $2,284 per FEU. “The recent U.S.–EU trade deal is unlikely to shift volumes significantly,” Levine said, pointing out that auto tariff reductions are still pending and alcohol exports remain subject to duties.

Elsewhere, Asia–North Europe spot rates slipped 6% last week to around $3,100 per FEU—the lowest since late June—while Asia–Mediterranean prices dipped 1% to the same level, their weakest since late May. “Rates on these lanes are about 60% lower than last year, and trans-Pacific prices are down 70%,” Levine added, citing continued vessel oversupply even as the global orderbook for new ships hits record highs.

Source: www.freightwaves.com