The past week has seen significant changes in trans-Pacific container rates, marking a significant shift on the shipping horizon as the peak season approaches.
Container rates from Asia to the U.S. West Coast surged in the latest data from SONAR and Freightos, as shippers pushed the peak season early to frontload goods ahead of potential tariff pauses in July and August, while ocean lines implemented general rate increases (GRIs) as of June 1.
The SONAR Container Atlas spot rate for loaded boxes departing Yantian, China for Los Angeles was $6,645 per forty foot equivalent unit (FEU) as of June 10, up from $6,100 on June 6. The rate from Ningbo, China increased to $6,439 from $5,797.
The Freightos Baltic Index for the week ending June 6 including GRIs saw rates double to $5,488 per FEU, with daily rates surpassing $6,000. Prices to the U.S. East Coast experienced a 60% increase, reaching $6,410 per FEU. Current rates exceed $7,000 per FEU, aligning with figures from the previous year when capacity constraints, driven by Red Sea dynamics and an early peak season, compounded by the strike threat by the International Longshoremen’s Association, pushed prices up.
Carriers are preparing for further trans-Pacific GRIs, ranging between $1,000 and $3,000 per FEU, scheduled for mid-June and July 1. This is in response to China’s ports grappling with backlogs from an earlier lull in demand, alongside the realignment of vessels and equipment to other lanes during the tariff quiet period.
Freightos research chief Judah Levine in a note said that as peak volumes converge with still-limited capacity and ongoing port congestion at several Far East hubs, the likelihood of these rate increases taking hold in June and July is significant. There is an expectation for rate relief by mid-July as demand eases, congestion dissipates, and more capacity is restored to trans-Pacific routes.
The U.S. ports are proactively preparing for the incoming surge of containers, incorporating lessons learned from the pandemic to mitigate potential congestion. The National Retail Federation had anticipated a decline in U.S. ocean import volumes in May, rebounding in June and peaking in July, as high tariffs had previously suppressed demand. They revised this outlook, noting current rate behavior and GRI announcements.
These projections suggest July’s peak season volumes will be 9% lower than last year’s August peak and 4% less than April’s levels, reflecting the impact of both strong April frontloading and a shipping pause “air pocket” because of high China tariffs. Even with significant inventory build-up earlier in the year, this year’s tariff-driven peak season may not witness the anticipated surge.
Global negotiations continue as the White House works towards securing trade agreements with China, the European Union, and other major trade partners ahead of the July and August deadlines. Any successful trade agreements may lead to a de-escalation of tariffs, but the forward pull of this year’s shipping volumes suggests demand and rates may decline in the late third quarter and into the fourth quarter, regardless.
This burgeoning demand for trans-Pacific containers has ripple effects on other trade routes. Freightos Asia-Mediterranean rates recently climbed by 32% to $4,285 per FEU, with daily rates now surpassing $4,800 per FEU as carriers plan mid-month GRIs and peak season surcharges for Asia-Europe and other lanes due to capacity shifts to the trans-Pacific route.
SOURCE : https://www.freightwaves.com/news/early-peak-coming-as-trans-pacific-container-rates-double
