- The majority of Cancellations on Transpacific Eastbound Routes.
- US Tariff Cut Pulled Forward Peak-Season Demand.
- 90-Day Tariff Extension Limits Further Cargo Spikes.
In the major East–West trade routes, out of the 723 sailings scheduled between weeks 35 (August 25–31) and 39 (September 22–28), only 43 sailings, which is about 6%, are expected to be cancelled. The bulk of these cancellations is happening on Transpacific eastbound routes, making up 60%, followed by Asia–North Europe and Mediterranean routes at 21%, and Transatlantic westbound routes at 19%. During this timeframe, a solid 94% of the scheduled weekly departures are expected to proceed as planned, reports Drewry.
Impact of US Tariff Policy on Demand
Earlier this year, the temporary cut in US tariffs on Chinese imports to 30% sparked a rush in peak-season demand, leading to a brief spike in volumes and rates during June and July. Now that the 90-day tariff extension is in effect until November 10, we probably won’t see any more demand surges, as most of the peak-season cargo has already been frontloaded.
Ocean Freight Rates Continue to Decline
In the ocean freight sector, spot rates are still on a downward trend. Drewry’s World Container Index has dropped for the tenth week in a row, falling 4% week-on-week to $2,250 as of August 22. Transpacific rates dipped by 4%, while Asia–Europe and Mediterranean trades saw a 5% decrease, although Transatlantic trades have held steady.
Outlook Remains Bearish for Rates
With new vessels entering the market and increasing supply, the short-term outlook for freight rates doesn’t look promising. Shippers are encouraged to stay flexible in the face of potential schedule disruptions and to lock in competitive contracts while the market conditions are still favourable.
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Source: Drewry
