China-US Accord Sparks Surge in Pacific Shipping Rates

By James Mayger and Weilun Soon
May 13, 2025 (Bloomberg) – A recent agreement between China and the US to reduce trade tariffs is highly likely to drive up freight costs as businesses scramble to take advantage of a 90-day grace period for shipping goods across the Pacific.

The recent surge in tariffs had led to a notable drop in shipments, with Chinese exports to the US plummeting by 21% last month and imports decreasing nearly 14%.Container shipping leader A.P. Moller-Maersk A/S reported that volumes from China to the US fell by an alarming 30-40% in April,a trend that seems to have persisted into May,evidenced by fewer air cargo flights leading up to Monday’s proclamation.

However, following productive weekend discussions, there’s optimism for a rebound in demand and pricing—especially as we approach peak shipping season when many vessels may still be tied up on other routes. Even before the deal was finalized, Chinese suppliers were beginning to ramp up their activities again; freight rates on trans-Pacific routes surged from $2,000 per forty-foot equivalent unit in mid-april to about $2,500 this week according to Jefferies’ latest report.

This uptick is welcome news for container shipping firms that have been struggling with declining rates—some nearing break-even points on certain routes. The global benchmark for container freight recently dipped just above $2,076 per forty-foot equivalent unit—the lowest it has been since December 2023 according to Drewry World Container Index.

Jefferies analysts noted that two key factors are set for improvement: normal volume resumption and the onset of peak season around July. With tighter capacity on trans-Pacific lanes now favoring ocean carriers more than ever before, they’re poised to increase freight rates considerably.

freight forwarders are among those who feel these rapid shifts first-hand; many view this trade truce positively. “We’re hopeful this can pave the way toward a lasting agreement that provides our clients with much-needed stability,” remarked a spokesperson from Maersk. “For now, our customers enjoy clarity over reduced tariffs for three months while we assist them in maximizing this chance.”

Typically at the start of each year, Chinese exports lag but tend to pick up momentum through summer months until peaking around September ahead of holiday shopping seasons.Interestingly enough though—last year saw no slowdown post-summer due largely as companies rushed purchases anticipating potential tariff hikes under President Trump’s management starting January.

Looking ahead within logistics circles involves reducing “blank sailings,” which refers specifically when parts of voyages are canceled or skipped altogether—to optimize existing capacity along trans-Pacific routes effectively as repositioning ships could take over forty days based on Jefferies’ estimates.

Lu Ting from Nomura Inc highlighted after Monday’s announcement how many exporters might have delayed shipments previously due solely due tariff concerns; thus expect an influx of pent-up exports soon!

Moreover any long-term resolution between China and America will likely shift trade dynamics globally too! For instance during March-April period alone—we witnessed remarkable increases in Chinese exports heading towards Vietnam & Thailand alongside their own rising shipments into America—a trend which may reverse now given lower tariffs allowing direct access back into US markets instead!

© 2025 Bloomberg L.P.
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