SEAFREIGHT: Asia-US container rates continue to face downward pressure

Container rates from East Asia and China to the United States will continue to face downward pressure due to increased capacity on the key trade route.

On Tuesday, market analysis group Linerlytica said shipping lines have failed to cut back on the massive capacity additions that have been introduced to the route since late May, when the United States reduced reciprocal tariffs on Chinese goods from a prohibitive 145 percent to a more palatable 30 percent.

Rates from Shanghai to both coasts of the United States on the global Shanghai Container Freight Index (SCFI) continued to slide, as shown in the chart below.

And Linerlytica said capacity is expected to continue to increase in July, as some carriers had already committed to chartering vessels before the current market downturn.

Judah Levine, head of research at online freight platform and marketplace Freightos, said the China cargo wave appears to be losing steam and carriers may have over-committed to capacity, particularly to the West Coast.

Rates from Asia to the West Coast have more than doubled from around $3,000 per 40-foot equivalent unit (FEU) in May to June.

"But by the end of last week these demand and capacity factors combined to push transpacific container rates down sharply," Levine said. “Last week’s average of $3,388/FEU is 43% below the June peak, although this price is still 22% higher than the end of May.”

Rates to the East Coast have followed a similar, albeit less dramatic, trend, Levine said, as demand on the shorter West Coast trade remains stronger.

Average spot rates from ocean freight and freight analysis firm Xeneta have also fallen significantly, as shown in the chart below.

Peter Sand, principal analyst at Xeneta, said capacity is now exceeding demand, leading to shippers resisting peak season surcharges.

“The Transpacific into US West Coast is the key battleground for carriers when it comes to China exports, so spot rates have fallen harder and faster as they prioritized bringing capacity back onto this trade in the immediate aftermath of the lowering of 145% tariffs,” said Sand.

See more:

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• China trade outlook improves, but container rates do not
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• President Trump Announces 20% Tariff on Vietnam's Exports, Easing Trade Tensions
• Top 5 Container Shipping Lines in the World in 2025
• SITC updates Vietnam-Intra Asia sailing schedules in Jul 2025
• Asia-Pacific Airlines Report 8.3% YoY Growth in Air Freight Demand in May
• Shipping Line Alliances and MSC Dominate Over 80% of Container Market
• International Shipping and Logistics Market Update - Week 26/2025 | Phaata

Source: Phaata.com (According to ICIS)

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