Are We Heading Back to Pandemic-Era Shipping Rates?
In a dramatic turn reminiscent of the early pandemic days, spot container freight rates have surged by as much as 30% over the past week. This spike is largely attributed to a rush by shippers to import goods ahead of the expiration of a 90-day tariff reprieve between the U.S. and China. The Shanghai Containerized Freight Index (SCFI) climbed to 2,072.71 points, marking a 486.5-point increase from the previous week. Similarly, Drewry’s World Container Index (WCI) reported a 10% weekly increase, reaching $2,508 per forty-foot equivalent unit (FEU) .
The Tariff Truce: A Temporary Relief
On 14 May 2025, the U.S. and China agreed to a 90-day reduction of tariffs on Chinese imports from 145% to 30%. This temporary relief has prompted a surge in shipping demand as importers aim to capitalize on the lower tariffs before they potentially revert. Major carriers, including Zim and MSC, have resumed or added services between China and the U.S. West Coast to accommodate the increased demand.
Capacity Crunch: A Brewing Storm
Analyst firm Linerlytica reports that over the next four weeks, carriers plan to increase capacity on the Transpacific trade by approximately 50%, raising weekly capacity from 377,000 TEU to an average of 560,000 TEU . Despite these efforts, the sudden demand surge is straining available capacity, leading to higher freight rates and concerns over potential port congestion.
Shippers’ Dilemma: To Ship or Not to Ship
The rapid increase in freight rates poses a significant challenge for shippers, especially smaller businesses with less negotiating power. Many are faced with the tough decision of absorbing higher shipping costs or risking delays that could impact their supply chains. The situation is further complicated by the uncertainty surrounding the duration of the tariff reprieve and the potential for rates to continue climbing.New York PostSeatrade Maritime
Looking Ahead: Navigating Uncertain Waters
As the shipping industry grapples with these rapid changes, stakeholders are closely monitoring the situation. The combination of increased demand, limited capacity, and geopolitical uncertainties suggests that elevated freight rates may persist in the short term. Shippers are advised to plan accordingly and consider alternative strategies to mitigate potential disruptions.
“The sharp rise in container spot rates comes as the market reacts to an agreement earlier in the month between the US and China which saw a 145% tariff on Chinese imports reduced to 30% for a period of 90 days from 14 May while the two sides continue negotiations on reciprocal trade relations.”
— Marcus Hand, Editor, Seatrade Maritime News
Stay informed on the latest developments in global shipping and logistics. Subscribe to our newsletter for real-time updates and expert analyses.
