The Trump administration continues to engage in a back-and-forth regarding tariffs with its major trading partners, implementing and rescinding tariffs intermittently. This uncertainty is prompting shippers to frontload shipments, which is likely to keep ocean container rates high. According to the latest Freightos Baltic Index, the spot rates for Asia to the U.S. West Coast rose by 3% to $5,078 per forty-foot equivalent unit (FEU) for the week ending January 31. Meanwhile, rates for the Asia to U.S. East Coast route increased by 1% to $6,718 per FEU.
The U.S. hastily removed 25% tariffs on imports from Mexico and China, yet maintained a 10% tariff on China. In response, Beijing imposed 15% tariffs on imports of coal, liquefied natural gas, and certain machinery as negotiations aimed at resolving the escalating trade tensions resume.
Judah Levine, head of research for Freightos, noted, “As shippers have already been pulling forward demand for several months, it’s challenging to predict how much frontloading will increase.” He added that during the current Lunar New Year holiday slowdown, ocean rates have remained stable, but demand and rates could rise afterward.
Additionally, diversions through the Red Sea and frontloading might elevate trans-Pacific container prices to both coasts. Levine suggested that rates could approach the 2024 peak season high of $8,000 per FEU for the West Coast, which coincided with a record month for shipping volumes.
While the recent tariffs primarily targeted illegal drugs and immigration, traders are keeping an eye on proposed “ordinary tariffs,” such as a potential 60% levy on Chinese imports to address trade imbalances. However, these measures are expected to be finalized in May after the U.S. Trade Representative’s recommendations in April, as outlined in Trump’s initial trade policy memo.
In contrast, rates for the Asia-North Europe route fell by 11% to $3,667 per FEU, while Asia-Mediterranean prices remained steady at $5,069 per FEU. Levine also highlighted that Trump has expressed intentions to impose tariffs on the European Union, with some carriers already introducing trans-Atlantic peak season surcharges for March, likely in anticipation of frontloading on that route as well. This frontloading could result in decreased rates and volumes once the tariffs are implemented or lifted.
