- Analysts caution that EU-US tariff deals and US-China trade negotiations in Stockholm will not revive weak container shipping demand or stop plummeting freight rates.
- Xeneta data shows spot rates from China to the US have sharply declined, with Far East–US West Coast lanes down 59% since June.
- Carriers are cutting capacity to slow the rate fall, but oversupply and falling demand suggest that challenges will persist through 2025.
Despite high-level trade discussions between the EU and the US, and renewed US-China talks in Stockholm, shipping analysts remain doubtful about any positive impact on the ocean freight market in 2025. The recent agreements and negotiations are not expected to reinvigorate demand or prevent freight rates from continuing their downward spiral, according to American Journal of Transportation.
Sharp Drop in Spot Rates Across Key US Lanes
According to Xeneta, a leading freight market intelligence platform, average spot rates from China to the US West Coast have dropped by 59% since June 1, now standing at USD 2,268 per FEU. The China–US East Coast trade lane has also seen a steep 43% decline, with rates falling to USD 3,796 per FEU. While the North Europe–US East Coast route experienced a milder drop of 5% since June, the year-to-date reduction totals 25%, bringing current rates to USD 2,000 per FEU.
Tariffs and Trade Talks Fail to Ease Pressure on Shippers
Emily Stausbøll, Xeneta Senior Shipping Analyst, remarked: “US trade deals are not a magic bullet and we should not expect them to breathe new life into the subdued ocean shipping market.
A 15% tariff on imports from the EU is not good news for shippers – it is just news that isn’t as bad as it could have been. We can also be sure US-China negotiations in Stockholm will not bring import costs back to where they were before Trump introduced the sweeping reciprocal tariffs in April.
Against a backdrop of subdued demand, spot rates on US trades have plummeted and are likely to fall further, although carriers have managed to slow the decline in recent weeks by removing capacity.
Any savings made through falling rates will pale in comparison to the financial impact of the tariffs, so even the most optimistic shippers must face up to the reality of the US trade policy.”
Carrier Strategies Under Pressure from Overcapacity
Stausbøll also addressed the challenges faced by ocean carriers: “Shippers frontloaded imports into the US during April and May following the temporary lowering of tariffs – that cargo rush is now over and freight rates are falling hard, particularly on the fronthaul trades from the Far East.
Carriers are already withholding capacity on US trades to keep freight rates from falling further, but they may be fighting a losing battle due to the significant overcapacity in the ocean container global fleet.
Carriers have reported massive profits in recent years in the wake of supply chain turmoil, but unless they can halt the dramatic decline in freight rates, those days may be over.”
Despite carriers’ efforts to manage supply and stabilize freight rates, the combination of soft demand, high fleet capacity, and lingering tariffs continues to weigh heavily on the ocean container shipping market. With little optimism from ongoing trade talks, 2025 is shaping up to be a challenging year for the global shipping industry.
Did you subscribe to our daily Newsletter?
It’s Free Click here to Subscribe!
Source: American Journal of Transportation
