The “delta between market average and mid-high” indicates that shippers negotiating Transpacific rates after the recent U.S.-China tariff reduction are paying higher prices, closer to the mid-high range of the market, compared to the overall average. This suggests that the announcement of a 90-day tariff pause, which is expected to boost trade, is already leading to an increase in freight costs for some shippers, reports Xeneta.
No Time To Waste
Peter Sand, Chief Analyst at Xeneta, comments on the recent US-China announcement regarding the temporary lowering of tariffs, stating that it has “fired the starting gun” for shippers to accelerate imports during the 90-day window of opportunity.
Sand emphasizes that shippers have “no time to waste,” and this rush of cargo is expected to exert upward pressure on spot rates in Transpacific trades. However, he also stresses the importance of understanding the market dynamics that follow such sudden shocks.
Delving into data, Sand notes that shippers are currently paying rates in the “market mid-high” for agreements finalized after the May 12th US-China announcement. Conversely, existing agreements struck before this date will temporarily keep a lid on the overall market averages.
He predicts that spot rates will “peak and then flatten as carriers redeploy capacity to match demand.” Following this, rates are expected to “begin to slide again just as we saw in Q1.” This entire cycle is anticipated to unfold over the “next two to four weeks.”
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Source: Xeneta
