According to Drewry, the World Container Index has experienced its fifth consecutive weekly drop, decreasing by 2.6% as the shipping market cools off after a period of tariff-induced fluctuations. This decline follows a notable increase in shipping rates that started in May, shortly after President Trump announced higher tariffs in April. While there was a steady rise in rates until early June, the trend has reversed as of mid-June, suggesting that the initial effects of these tariffs are fading. This week saw significant drops on transpacific routes; for instance, rates from Shanghai to Los Angeles fell by 4%, landing at $2,817 per FEU (forty-foot equivalent unit), while those from Shanghai to New York dropped by 6%, now at $4,539 per FEU. Even with these reductions, current prices remain higher than they were before the tariffs were implemented ten weeks ago—Los Angeles routes are still up by 4%, and New York routes have surged by 24% compared to May 8.
Drewry’s analysts predict that this downward trend is highly likely to persist due to weak demand being a major contributor. Their Container Forecaster report suggests that we may see an even greater imbalance between supply and demand during the latter half of 2025, which could push spot rates down further.
The market is rife with uncertainty; future rate fluctuations hinge on two main factors: any potential new tariffs under Trump’s governance and changes in capacity linked to U.S. penalties aimed at Chinese vessels. The ongoing decline is exacerbated by unpredictable tariff policies from the Trump Administration—recently delaying “reciprocal” tariffs until August 1—and growing concerns within the industry about overcapacity in container shipping.
While current rates might seem high compared to pre-tariff levels, experts warn that without strong demand or stability in policy direction, we could be looking at more declines ahead as we move into next year’s second half.
