Weekly highlights
Ocean rates – Freightos Baltic Index
Asia-US West Coast prices (FBX01 Weekly) decreased 1% to $1,999/FEU.
Asia-US East Coast prices (FBX03 Weekly) increased 4% to $3,628/FEU.
Asia-N. Europe prices (FBX11 Weekly) increased 1% to $2,284/FEU.
Asia-Mediterranean prices (FBX13 Weekly) increased 1% to $2,297/FEU.
Air rates – Freightos Air index
China – N. America weekly prices increased 7% to $6.03/kg.
China – N. Europe weekly prices increased 6% to $4.18/kg.
N. Europe – N. America weekly increased 8% to $2.00/kg.
Analysis
Last week’s Trump-Xi meeting in South Korea resulted in an interim US-China trade agreement that marks a significant deescalation from the tensions of the last few weeks.
The deal will have the US reduce fentanyl-related tariffs on China by ten percentage points and extend the tariff truce for one year, putting the overall baseline tariff on all exports from China at 20% and back to levels last set in March. The US will also postpone its USTR port call fees on China-linked vessels for one year starting November 10th.
In exchange, China will work to restrict fentanyl-related chemical flows and will roll back restrictions introduced this year, including controls on rare earth mineral exports, a pause in US soybean purchases and port call fees for US-linked vessels.
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For the container market, the port call fee pauses will mostly mean a sense of relief for Chinese carriers who were facing significant costs if these surcharges had remained in place. Operators of US-linked container vessels calling in China will welcome the pause too, though these represent a much smaller slice of the market. It is possible non-Chinese carriers will keep some of their adjustments to deployments of China-built vessels in place just in case the restrictions are restored on short notice.
The China-US deescalation may be unlikely to spur a sudden surge in transpacific freight demand. About two thirds of all exports from China to the US face tariffs of up to about 25% put in place during the first Trump administration. With these coming on top of the now 20% tariff baseline on all Chinese exports, tariffs on China are still significantly higher than on other countries. Importers diversifying their sourcing will probably continue to do so. There’s also already been significant frontloading including an early peak season on the transpacific, and November and December are in any case typically slow months for this market.
Even with the agreement things remain far from certain. The US Supreme Court will start hearing arguments today in the case challenging Trump’s use of IEEPA for most of the tariffs introduced this year, with a ruling possibly coming as late as the end of the court’s term in June. A decision striking down those tariffs could spur a significant shot of at least short term uncertainty and volatility for freight. But as the White House continues to roll out sectoral tariffs using other areas of trade law, and as there are alternative, more recognized, paths for country-specific tariffs, it is unlikely that the ruling will mean that US trade barriers disappear for long.
But last week’s agreement – along with the other US deals with Far East countries announced recently – does mean that supply chain stakeholders have more certainty and stability regarding the tariff landscape at the moment, and possibly for the next twelve months, than at any point so far in 2025. This albeit tenuous stability could mean that for 2026 we won’t see the frontloading and start and stop ocean volumes that we saw this year, suggesting a return to seasonality for freight markets, even if tariffs mean higher costs to importers.
Container rates were stable last week, but despite the seasonal demand lull November 1st GRIs have pushed prices up on several lanes – at least for now.
Daily rates for transpacific containers to the West Coast have jumped $1,000/FEU to $2,962/FEU so far this week and back to levels last seen in July. But there are already reports that carriers are offering much lower rates, and prices to the East Coast have already fallen about $100/FEU this week, suggesting that rate increases on this lane did not take at all.
Asia – Europe daily prices are up about $300/FEU to $2,500/FEU and rates to the Mediterranean are up $500 to about $2,800/FEU. Carriers will likely only succeed in maintaining these price increases or in keeping rates from slipping back to lows hit in mid-October, if they are able to adjust and keep capacity level with likely easing demand via blanked sailings. Even with stronger year on year volumes and persistent congestion at European hubs, current Asia- Europe rates are more than 40% lower than a year ago suggesting capacity growth is responsible for overall downward pressure on rates even as Red Sea diversions continue.
China – US Freightos Air Index air cargo rates have climbed 15% since mid-October to about $6.00/kg, with daily rates above $6.23/kg so far this week despite volumes likely lower than last year and skepticism that there will be much of a peak season. Prices are still below the $7.00/kg level this time last year even with less transpacific capacity than a year ago. But rising rates do suggest the start of some peak season demand bump. Transatlantic rates increased 8% to $2.00/kg last week to their highest level since April.
Prices from China to Europe are up 7% since mid-October to about $4.20/kg and are 5% higher than last year as trade war impacts have meant growing demand on this lane as transpacific volumes decrease. Significant increases in capacity to these alternative lanes are likely responsible for rates nonetheless about on par with a year ago.
