Against the backdrop of the U.S. persistently wielding the “tariff stick” against numerous global trade partners, freight rates on the trans-Pacific route have experienced a nine-week consecutive decline, plummeting nearly 70% to hit their lowest point since 2023.
The fundamental reason for the drop in freight rates is weak demand. The rush for shipping space from May to July has passed, U.S. import demand has weakened, and spot freight rates on U.S. routes continue to fall. Currently, the U.S. East Coast route has dropped below $2,800/FEU, while the U.S. West Coast route hovers around $1,700/FEU, approaching the cost line for shipping companies.
Meanwhile, demand outside the U.S. remains strong. As a barometer of global trade, shipping giant Maersk recently raised its 2025 financial outlook, forecasting global container market growth of 2% to 4% this year. As U.S. route freight rates continue to decline, many shipping companies are quickly pulling back, suspending related routes to “stem the bleeding,” while also “shifting course” to accelerate expansion into emerging markets such as Africa, South America, and India.
U.S. Route Freight Rates Continue to Decline
Shipping Market Oversupplied
Amid tariff disruptions, U.S. ocean freight rates remain under pressure. The latest Shanghai Containerized Freight Index (SCFI) fell by 61.06 points to 1,489.68 points, a weekly drop of 3.9%, marking nine consecutive weeks of decline. Among them, the U.S. West Coast and U.S. East Coast routes saw declines expand to 9.8% and 10.7%, respectively, while the Europe route fell 4.4% and the Mediterranean route dropped 0.6%.
“The recent shipping market situation is not optimistic, with freight rates continuously falling. The U.S. West and East Coast routes have seen the largest declines. The U.S. East Coast route has already dropped below $2,800/FEU, but there is still profit margin, while the U.S. West Coast route is around $1,700/FEU, nearing the cost line for shipping companies,” said Mr. Dong, who has worked in freight forwarding for many years. He explained that the reason for the decline is simple: shipping capacity has been increasing, but cargo volume has not kept up, resulting in an overall market oversupply.
“Import volume is a barometer for freight rates. With U.S. import volume sharply declining, freight rates certainly cannot rise,” Mr. Dong further pointed out. According to data released by the National Retail Federation (NRF), U.S. import volume in June fell 8.4% year-on-year due to tariff hikes by the Trump administration, far exceeding expectations.
The latest Shanghai Containerized Freight Index (SCFIS) shows the U.S. West Coast base port index at 1,082.14 points, down 4.2%. The current index is 60% lower than last summer’s peak, with trans-Pacific eastbound freight rates returning to pre-Red Sea diversion levels.
“Tariffs have slowed U.S. market demand, and currently many U.S. buyers and domestic exporters are in a wait-and-see phase. For U.S. buyers, procurement costs are 30%-50% higher than last year. If retail prices remain unchanged, profits will shrink by 40%. Domestic exporters, to retain U.S. clients for long-term cooperation, are also sacrificing their profits,” Mr. Dong said.
Strong Demand Outside the U.S.
Shipping Companies Suspend Routes to Stem Losses
Recently, global shipping giants have disclosed their latest financial reports.
Maersk mentioned in its Q2 report that its container shipping business was significantly impacted, noting a 35% year-on-year decline in China-U.S. container throughput from April to June. In response, Vincent Clerc, CEO of Maersk, stated that U.S. tariffs have indeed dampened shipping demand.
Just recently, Maersk raised its full-year container volume growth forecast to 2%-4%. Clerc bluntly said, “Demand is strong almost everywhere except the U.S.” Maersk noted in its report that the decline in North American imports was offset by strong demand in Europe, Latin America, West Asia, and Africa, with this regional demand divergence supporting overall performance.
With U.S. West Coast freight rates plummeting, shipping companies have had to pull back quickly to avoid “bleeding.” In July, Mediterranean Shipping Company (MSC) was the first to suspend its U.S. West Coast PEARL route service, followed by CU Lines delaying plans to reopen its U.S. West Coast route. Meanwhile, MSC recently announced the launch of two new routes to strengthen its service capabilities in the Asia-West Africa and Far East-South America West emerging markets: the IROKO service, a new direct route connecting Asia and West Africa, and the ALPACA service, a new fast route from the Far East to South America’s West Coast.
Zheng Jingwen, Deputy Director of the International Shipping Research Institute at the Shanghai International Shipping Research Center, pointed out, “Currently, overall container shipping demand lacks growth momentum, exhibiting a ‘peak season without peak’ market characteristic. Freight rates on most routes continue to adjust, with weak supply-demand dynamics on Europe-U.S. routes, particularly the Pacific route, which has seen significant declines. In emerging markets, routes such as Far East-Australia/New Zealand, Middle East-India/Pakistan, and Africa have maintained slight freight rate increases.”
U.S. Trade Policy Direction Becomes Core Variable
Significant Increase in Uncertainty in H2
In the first half of the year, container shipping prices first fell and then rose. According to the Ningbo Containerized Freight Index (NCFI) released by the Ningbo Shipping Exchange, the average NCFI composite index in H1 was 1,204.3 points, down 29.1% year-on-year. Container shipping prices continued to decline in Q1, stabilized from April to May, and saw a temporary increase in late May due to significant U.S.-China tariff cuts, before sharply falling again due to the return and addition of U.S. route capacity.
Industry insiders noted that this phenomenon is closely tied to expectations around U.S. tariff policy.
Earlier, Zheng Jingwen told Fengkou Finance, “Although container trade volume growth on North America-related routes slowed significantly in H1, emerging market-related routes maintained high growth rates. Among emerging markets, Far East-South Africa, Far East-South America, and Far East-Middle East/Indian subcontinent routes saw container trade volume growth rates of 20.4%, 16.1%, and 15.0%, respectively, demonstrating strong development potential.”
Meanwhile, major Chinese ports have successively added international shipping routes targeting emerging markets. According to statistics, since 2025, Shanghai Port has added 12 new international routes, Shenzhen Port’s Yantian Port Area has added 11, and Guangzhou Port has added a net 7 new foreign trade routes, primarily serving emerging regions such as Latin America, Africa, and Southeast Asia.
Zheng Jingwen stated that in H2, the container market faces significantly more uncertainties. From a supply-demand perspective, new vessel deliveries in H2 will exceed 1 million TEU, continuously impacting market dynamics. From an event disruption standpoint, the direction of U.S. tariff policy, port strikes, and other developments remain highly uncertain, persistently affecting supply chain stability. Overall, peak season effects may weaken in H2, but short-term supply chain adjustments will amplify freight rate volatility.
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