Asia-US container rates trend lower, but Trump tariff risk weighs on global trade

Asia-US ocean freight rates fell on the impact of Lunar New Year, but Trump tariff risk and shipping alliance restructuring could change the market in the coming period.

Trump tariff risk weighs on global trade

Trans-Pacific container rates fell last week as manufacturing and logistics activity in China slowed down due to the Lunar New Year holiday, which begins on Wednesday.

According to the Freightos Baltic Dry Index, freight rates from Asia to the US West Coast fell 7% to $4,938 per FEU in the week ending January 24. Rates from Asia to the US East Coast also fell 1% to $6,656 per FEU.

Factories in Asia and related logistics services are shutting down for the 15-day Lunar New Year holiday.

“Trans-pacific rates to the West Coast have dipped by 17% since mid-January and Asia-Europe prices are 25% lower than just a few weeks ago, but at about $5,000/FEU and $4,000/FEU respectively, these rates are still more than double 2019 levels as continued Red Sea diversions absorb capacity across the market,” said Judah Levine, head of research at Freightos. “And though the six-week phase one Israel-Hamas ceasefire is into its second week and the Houthis have paused attacks on passing vessels so far, carriers – with some limited exceptions – will not take steps to resume Red Sea traffic until they are convinced there will be long-term quiet.”

CMA CGM is the only major shipping line to maintain regular service through the Suez Canal, with its BEX2 service connecting Shanghai and Beirut.

Trump Tariff Risk Could Keep Freight Rates High

Levine said that stockpiling ahead of former President Donald Trump’s tariffs could keep freight volumes and rates higher than usual in the first quarter and possibly into the second quarter, depending on when the tariffs are imposed. However, if the tariffs take effect, volumes and rates could fall significantly thereafter.

Freight rates from Asia to northern Europe fell 12% to $4,122 per FEU, while rates from Asia to the Mediterranean fell 4% to $5,075 per FEU, according to Freightos.

Trump announced that he would impose a 25% tariff on imports from Canada and Mexico starting Feb. 1. However, non-trade tariff moves – such as this week’s dispute over the repatriation of deportees from the US to Colombia – suggest that the tariffs could be changed or scrapped. Canada and the European Union have also threatened retaliatory tariffs, which could hurt US exports.

New shipping alliances could impact rates

Levine noted that it remains to be seen how the rollout of new shipping alliances in February will impact rates. Notably, the Gemini alliance between Maersk and Hapag-Lloyd – a hub-and-spoke model that promises 90% schedule reliability – could change the market.

Sea-Intelligence’s annual Global Liner Performance report shows global schedule reliability in December was just 53.8%, hovering around 50-55% throughout 2024.

However, the average delay for slow vessels has dropped to 5.28 days, the lowest since July 2024.

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