Shipping container rates from Asia to the US have witnessed a noticeable decline this week due to increased capacity and a decrease in volumes, which resulted from importers frontloading their shipments to avoid tariffs. The rates for containers traveling from Shanghai to Los Angeles dropped by 9%, and those to New York decreased by 6%.
According to Drewry, these are the lowest rates recorded this year. Additionally, Drewry’s World Container Index indicates a 3% reduction in global average rates, also reaching its lowest point in the past year.
Experts predict that rates might continue to decline due to the ongoing expansion of shipping capacity. Judah Levine, head of research at Freightos, highlighted that the impending tariffs have significantly influenced import behavior, with many opting to frontload volumes before potential increases take effect.
The anticipated 60% tariffs on Chinese goods could be implemented as soon as April, leading to a saturated market before the deadline. This shift, combined with seasonal demand fluctuations, has contributed to the steep reduction in transpacific rates.
Levine noted that if the frontloading trend from recent months was as substantial as expected, it could result in subdued demand in the peak season as well. In terms of liquid tanker rates, there has been a mixed response across trade routes.
US chemical tanker freight rates showed variability, with some routes experiencing slight increases while others faced declines. The trade route to Asia has seen a drop in cargo volumes as newly imposed tariffs curtailed spot activity, leading to reduced rates.
Conversely, the route from the US Gulf (USG) to Rotterdam has seen a rise in freight rates due to limited available space, which shipowners expect to continue throughout March. In contrast, the market from USG to India remains weak with excess capacity, potentially driving rates lower if the trend persists.
Overall, while inquiries for various chemicals have been noted, actual transactions have been limited.