Shipping Rates Surge as US-China Tariff Standstill Opens New Opportunities

By Alison Koo (The Loadstar) – With the recent agreement between the US adn China to reduce tariffs, shipping companies are gearing up for an earlier-than-usual peak season on transpacific routes. According to container shipping consultancy Linerlytica, surcharges ranging from $1,000 to $2,000 per 40ft container have been announced.

Typically, peak season runs from July through September as retailers in the US and Europe stock up on goods from Chinese manufacturers in preparation for Thanksgiving and Christmas.During this 90-day period of lowered tariffs, many US importers are likely to expedite their orders to sidestep potential price increases once the grace period ends.

Linerlytica noted that a significant 115% reduction in US tariffs was more significant than anticipated due to noticeable declines in import volumes that would soon effect store inventories. This trend is expected to reverse with a surge in imports over the next three months that could surpass even those seen during the pandemic’s height.According to regulations set by the US Federal Maritime commission, shipping lines must announce any price changes at least 30 days prior. However, several carriers already have a general rate increase (GRI) scheduled for May 15 on eastbound transpacific shipments—marking what could be one of the first GRIs in months that actually sticks.

For instance, ONE has declared a GRI of $1,000 per 40ft container while CMA CGM and Yang Ming plan increases of $2,000 per unit. Other major players like Cosco and HMM have set their GRIs at an even steeper $3,000 per container. All seven carriers also plan identical GRIs starting June 1st; this will serve as a crucial test for early peak season dynamics and provide insights into current inventory levels among US imports.

Last week’s Shanghai Containerised Freight Index (SCFI) indicated a slight uptick of 3% in rates from Shanghai to the west coast of America—now sitting at approximately $2,347 per 40ft container—as liner operators adjusted capacity while hoping for resolution regarding trade tensions between these two economic giants.

Linerlytica further commented: “Spot rates have remained stable since May’s increase at around $2,400 but are projected to rise above $3,000 soon if demand rebounds strongly as retailers work on replenishing stocks after April’s cargo shipment slump.”

Taiwanese carrier Yang Ming recently reported Q1 revenue hitting $1.38 billion—a modest rise of 4%—but it’s net profit fell by about 23%, totaling around $238 million. The company believes that this temporary pause in tariff disputes may enhance cargo flow across transpacific routes.The Loadstar continues its reputation as an essential resource within logistics and supply chain management circles by providing insightful analysis and commentary.

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