Global Trade Update – The shipping industry faces mounting challenges in stabilizing freight rates amid plummeting Chinese exports and ongoing ripple effects from the U.S.-China trade war. Recent data highlights stark contrasts between transpacific and Europe-bound routes, with carriers scrambling to adapt to shifting demand and geopolitical pressures.
U.S. Routes: Temporary Stability After Steep Declines
- Far East to U.S. West Coast: Rates hold steady at $2,790 per forty-foot container (FEU) since mid-April.
- Far East to U.S. East Coast: Rates remain unchanged at $3,830 per FEU.
This follows dramatic drops earlier in 2025, with rates plunging 52% to the West Coast and 44% to the East Coast since January. A brief April surge—16% and 10% respectively—was driven by importers rushing to beat Donald Trump’s April 9 tariffs on Chinese goods.
Europe’s Downward Spiral
- North Europe Rates: Fell 8% to $2,130 per FEU on May 1—the lowest since December 2023.
- Mediterranean Routes: Dip 1.6% to $3,155 per FEU.
Despite some cargo diversion from U.S. routes due to tariffs, excess capacity overshadows demand. “Redirecting goods to Europe isn’t a quick fix,” notes Peter Sand, Xeneta’s Chief Analyst. “Finding new buyers takes time, and carriers are struggling to balance supply.”
Carriers’ Pandemic-Era Tactics
To counter China’s export slump post-tariffs, shipping lines revived blanked sailings canceling voyages to reduce capacity, a strategy last widely used during COVID-19. Sand credits this move, alongside a slight April demand rebound, for propping up U.S. rates. However, he warns: “This stability is fragile. If U.S. consumer spending slows in Q2, rates will resume their decline.”
Outlook: Volatility Ahead
Xeneta urges stakeholders to brace for ongoing turbulence. While carriers deploy agile strategies to align capacity with trade shifts, the sector remains vulnerable to weaker demand and geopolitical shocks. “The downward trend is likely to restart,” Sand cautions, underscoring the industry’s precarious balancing act.
Bolbuk Insight: The shipping sector’s struggle mirrors broader global trade uncertainties, with ripple effects for economies reliant on maritime logistics. As carriers navigate this “mission impossible,” adaptability and strategic capacity management will dictate survival in an increasingly unpredictable market.
Source: Xeneta, Trade Analysts