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Dive Brief:
- Ocean spot rates from Asia to North America have mainly cooled from a sharp uptick to start June due to low demand for U.S.-bound cargo, according to Drewry’s World Container Index.
- During the week of June 25, rates per forty-foot equivalent unit from Asia to the U.S. West Coast fell 7% to $5,593 while rates to the East Coast remain high at $7,183, increasing 1% week over week, per Freightos data.
- Slowing demand and increasing capacity are causing a downturn in spot rates, especially to the West Coast, where carriers added the most capacity in response to higher U.S. tariffs, Freightos said in its weekly freight update.
Dive Insight:
While rates cool for cargo bound to the U.S. West Coast from Asia, demand is expected to follow a similar pattern, as many shippers already frontloaded cargo in recent months in response to fluctuating U.S. tariff actions.
The drop in rates “is a sign that the recent surge in imports to the US, which occurred after the temporary halt of higher US tariffs, will fail to have the lasting impact we had initially expected,” per Drewry’s index.
While Asia to the U.S. East Coast rates did go up 1% in the past week, per Freightos, specific rates from Shanghai to New York decreased 13% to $5,703 per forty-foot equivalent unit in the past week, Drewry said. Spot rates are expected to decline further due to a weakening supply-demand balance during the second half of the year.
“The volatility and timing of rate changes will depend on the outcome of legal challenges to Trump’s tariffs and on capacity changes related to the introduction of the US penalties on Chinese ships, which are uncertain,” per Drewry.
Since many importers frontloaded cargo during the recent tariff lull, much of this year’s volumes are expected to hit ports by next month, ushering in an early arrival of peak season, Clint Dvorak, senior director of ocean operations at Seko Logistics, said in an email. After July, double-digit year-over-year volume declines are forecasted in August, September and October.
With demand also expected to dip after May and June’s surge, it will be critical for shippers to watch how carriers respond to vessel downsizing, service suspensions and/or blank sailings, Dvorak said.
