15-05-2025
- Business
- Wall Street Journal
Shipping Rates Rise as U.S.-China Trade Truce Drives Import Surge
The cost to ship a container of Chinese-made goods to the U.S. is jumping as importers race to pull cargo across the Pacific during a three-month trade-war truce.
Freight rates from China to the U.S. West Coast have risen about 8% this week as bookings have boomed, shipping executives and brokers in Singapore and London say. Ocean carriers are jacking up that rate by as much as 50% in the coming 10 days or so, they added. This means shipping a container from Shanghai to Los Angeles in the coming weeks could cost over $3,000 per twenty-foot equivalent unit, or TEU, the standard industry gauge.
Forwarders in Singapore and Shanghai said big carriers are quoting rates for sailings through the end of May at about $900 per TEU higher than this week. Confirmation of the rates' trajectory will come with the release of the new Shanghai Containerized Freight Index next week.
'As the tariff pause comes with a definitive and eroding timeline, it increases the pressure on U.S. importers to ship as much as they can,' said Jonathan Roach, a container analyst at London maritime consulting firm Braemar Shipbroking. 'We expect the freight market to respond upwardly and quickly.' A swift increase in liner capacity and high vessel use through the summer are likely, he added.
The rollback in tariffs has effectively pulled forward the industry's peak season, which typically runs from July to October, when big retailers such as and Walmart load up for back-to-school and holiday shoppers. Some analysts say freight rates could approach Covid-era peaks of about $20,000/TEU over the next three months. Competitive pressure often drives carriers to cut or withdraw such unilateral rate increases, but that isn't likely this time, and increases scheduled for May and early June will likely stick, HSBC analysts said in a report.
'There is already a large amount of cargo ready to go as U.S. importers have been adopting a wait-and-see' approach, said Vespucci Maritime CEO Lars Jensen, who advises big carriers. 'The truce also expires in the middle of the usual peak season and we expect a possible pull-forward of cargo creating a shorter, sharper peak season from basically right now.'
Other industry officials, including Gene Seroka, executive director of the Port of Los Angeles, say the 90-day tariff rollback may not be enough to fuel sustained growth in trans-Pacific cargo volumes after they plummeted 25% to 40% in April. Even with the rolled-back tariffs, prices for consumer goods are rising as retailers charge more, which could damp demand and hold back a continued surge in bookings and rates.
Still, freight rates, at least in the short term, are also buoyed by continued uncertainty about when it will be safe to return to the Red Sea. The critical passage to the Suez Canal has largely been a no-go zone for big carriers for more than a year as Yemen's Houthi militants attack commercial ships and tankers. So far, a truce in that conflict announced by the U.S. following weeks of airstrikes hasn't been enough to quell shipowners' fears.
Write to Costas Paris at
