Demand on major deepsea and air tradelanes is expected to be going downhill for the rest of the year, as carriers seek to mitigate rate erosion.
In its Weekly Container Market Development Report, maritime analyst Braemar reported that China’s exports accelerated last month, as a reprieve on US tariffs prompted a rush of orders ahead of the new August deadline.
According to its data, Chinese exports climbed 5.8% year on year, up from a 4.8% rise in May, while those to the US fell 16%, less than half the 34.5% drop seen in May.
But the outlook for the rest of the year is less upbeat.
Aggressive stockpiling to avoid supply chain shocks has quashed any likelihood of a H2 peak season, with freight rates for the rest of the year expected to follow the projected volume decline.
“[Ocean] rates are forecast to decline steadily from mid-2025, as vessel supply growth outpaces demand, and idle capacity is expected to rise,” said Veson Nautical’s Shipping Market Outlook Q3 25 Forecast.
But Dharshini Shegran, Flexport director and regional ocean manager of North Europe, said carriers were pulling back on tonnage deployment in an effort to mitigate the rate erosion.
“Space is still extremely tight for the next two weeks. We don’t see a let up of space until early August. I’ll be curious to see how that impacts rate levels.
“We did see quite an aggressive blank sailing plan announced by CMA for August. If we see other carriers come out with aggressive end-of-July/early-August blank sailing plans, this could further constrict the market.”
Ms Shegran highlighted that demand behaviour and seasonal boosts would depend on the tradelane.
“As far as Far East westbound is concerned, I think we’re already seeing an early peak season now, and we’re seeing that potentially drag into August as well. But the intensity of that might not be like previous peak seasons we’ve seen in July and August,” she said.
“On the transpacifc eastbound, we’re kind of seeing the same thing,” she added.
Ms Shegran noted that the front-loading had also spurred an early peak season – “a mad rush of cargo” on the latter trade – but “we’re now starting to see that wean off”.
She said: “The US transpacifc eastbound market generally sees a pre-holiday peak season and we might see a slightly reduced version of that. But I do still think we will see a peak season, because the holiday season usually drives a lot of that US market.”
Ms Shegran continued that for the transatlantic westbound, the peak season was slightly different.
“It’s a little bit more of a steadier market. So, I don’t think we’ll see that much difference on that tradelane,” she explained.
And it’s a similar story in the airfreight sector.
Franco Babini, Flexport’s senior air pricing associate, explained that “considering the front-loading that happened in Q2, this year’s peak is probably going to be less intense”.
“So, we might not see very large price escalations,” he added.
“We’ve seen in the past that sometimes the peak is starting towards the end of September, but this year we might have a delayed start, more towards mid Q4 when the capacity in the market shrinks because of the winter schedule.”
But Mr Babini underscored that “it’s a bit tough to predict what’s going to happen since there’s so much volatility in the market”.
“This will definitely depend on evolving tariffs and if any new agreement is actually reached with the US,” he explained.
Indeed, Braemar noted that “investors and economic policymakers are keeping a close eye on whether Americans continue to spend… since consumer spending powers about two-thirds of the US economy”.
