Weekly highlights

Ocean rates – Freightos Baltic Index

Asia-US West Coast prices (FBX01 Weekly) increased 10% to $2,465/FEU.

Asia-US East Coast prices (FBX03 Weekly) increased 3% to $3,647/FEU.

Asia-N. Europe prices (FBX11 Weekly) fell 1% to $2,365/FEU.

Asia-Mediterranean prices (FBX13 Weekly) fell 5% to $2,751/FEU.

Air rates – Freightos Air index

China – N. America weekly prices fell 1% to $5.43/kg.

China – N. Europe weekly prices fell 1% to $3.75/kg.

N. Europe – N. America weekly prices fell 5% to $2.13/kg.

Analysis

It’s been another headspining week in Trump’s second trade war replete with more escalations, u-turns and confusion and uncertainty for shippers.

The president’s unprecedented reciprocal tariffs on about 60 US trading partners announced on April 2nd went into effect on the 9th, only to be paused for three months a day later. China – which chose to retaliate against the reciprocal tariffs – was excluded from this 90-day pause as a flurry of retaliations and counter retaliations ended with both countries imposing a minimum of 125% tariffs on each other.

Trump further exempted electronics – including smartphones, computers and semiconductors – from all reciprocal tariffs late last week for an unspecified period of time. This carve out includes these types of goods from China, though the president’s 20% tariffs imposed on China earlier in the year as well as any from previous years would still apply.

To start the month the president initiated a trade investigation into semiconductors – and the many electronics that contain them – which could mean the electronics exemption will be short lived and replaced by a separate, global, sectoral tariff in the coming weeks, with an investigation into pharmaceutical trade also underway.

As the 90-day pause was limited to the reciprocal tariffs, it kept the 10% global tariff in place and other tariffs like the 25% levy on Canada and Mexico and 25% tariffs on vehicle imports in effect as well. Trump stated though, that he is considering a short-term exemption for vehicle imports to give companies time to shift operations to the US.

Many countries are already pushing to negotiate with the US during this three month reprieve though no settlements have been announced yet and the EU, for example, reports that talks have not been productive. Trump has called on China to come to the negotiating table as well. With so much apparently subject to change and therefore still up in the air, importers are very hesitant to make any drastic changes to their supply chains just yet.

For freight, last week’s reciprocal tariff roll out resulted in reports of a widespread drop in container bookings out of Asia. The 90-day pause on those tariffs alongside the escalation of US trade hostilities with China however, mean that while shipments out of China remain paused, many of those sourcing from other Asian countries have already started increasing their orders again in an effort to get ahead of possible tariff resumptions in July.

With a minimum of 125% tariffs on all goods out of China remaining in place, there are reports of an extreme drop in container export bookings out of China as shippers wait and see what will happen next, with reports of an increase of blanked sailings on this lane as demand slumps.

Many US importers on this lane had been frontloading goods since the November election in anticipation of tariff hikes. This inventory build up should enable many shippers to hit pause for a while and see where negotiations might lead before deciding their next moves – shifting to other sourcing options or resuming shipments from China and facing higher costs.

For shippers on other lanes, the 90-day reprieve means another window to pull forward goods ahead of possible tariff increases, with reports that frontloading is already underway. This new opportunity for frontloading will likely mean some increased demand for ocean freight on these lanes in the near term, followed by lower demand (and rates) after the deadline passes – another indication that the typical peak season months will be subdued due to demand pulled forward since late last year.

The near term need to blank sailings out of China and possibly increase services from other origins in Asia may prove challenging for ocean carriers and cause delays for shippers, with empty containers concentrated in China likely to pose a challenge too. Transatlantic surcharges announced for May could also point to carrier expectations of frontloading ahead of the July deadline.

The overall Asia – N. America lane-level container rates increased somewhat last week, reflecting the start of the month GRIs, though daily rates so far this week have reversed much of those modest gains. But the likely pull back in demand out of China and increase in demand from other Asian origins may be reflected in diverging rates on the port-pair level.

Freightos Terminal data shows that container rates from China, Taiwan and Vietnam to the Long Beach all climbed sharply following the April 2nd tariff announcements – possibly reflecting the rush to load goods by April 9th when the reciprocal tariffs went into effect. But while rates from Shanghai have dropped 16% since tariffs went into effect, prices from Taiwan and Vietnam have stayed elevated.

In other trade war-related news for ocean freight, the USTR’s proposed port call fees targeting Chinese-made vessels will likely be revised to a less far-reaching version and may not be rolled out for several months, as this measure will be part of the more comprehensive Maritime Action Plan that the president last week requested that federal agencies deliver within seven months.

For air cargo, the looming May 3rd US de minimis cancellation for all Chinese imports may already be resulting in a slow down of e-commerce imports from Chinese platforms like Shein and Temu. Freightos Air Index China – US rates nonetheless remained elevated at close to $5.50/kg last week. The electronics and pharmaceuticals exemptions from reciprocal tariffs, as well as the approaching May 3rd roll out for automotive parts tariffs, could drive some short term increase in air cargo demand for these types of goods, though so far these factors have not been reflected in rate increases.