Freightos Baltic: Transpacific and Asia–Europe rates retreat as US-China tensions escalate

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Transpacific container rates continued to slide over the past week, reaching the lowest since before the Red Sea crisis in late 2023. Weaker US import volumes—now estimated at their lowest since mid-2023 following earlier frontloading linked to trade war uncertainty—have combined with expanding vessel capacity to exert tremendous downward pressure on freight prices.

On Asia–Europe routes, likewise returning to 2023 levels. Despite demand holding stronger than a year ago, ongoing congestion and recent labour disruptions at several key ports have failed to offset the effects of rapid capacity growth. Carriers plan to implement GRIs of about $1,000/FEU for Asia–Europe services in November, alongside hikes for Asia–North America lanes, but recent capacity cuts have so far done little to stem the decline.

Geopolitical tensions also weighed on sentiment. Hopes that the US Trade Representative (USTR) would delay or withdraw planned port call fees ahead of the October 14 rollout faded as both Washington and Beijing unveiled a series of retaliatory trade measures. China announced new restrictions on rare earth exports—some effective immediately, others from 01 December—while the US warned of 100% tariffs on all Chinese exports starting 01 November. The White House’s 145% tariff pause, extended in August, is due to expire 10 November.

The USTR’s new port call fees, targeting Chinese carriers, and China’s reciprocal levies on US-linked vessels are expected to have limited operational impact. Major carriers have indicated no immediate changes to schedules or surcharges, while many have adjusted deployments to minimize exposure. Clarkson Research estimates the Chinese measures will affect only about 5% of port calls.

In parallel, easing conflict conditions in the Middle East have prompted expectations of renewed container traffic through the Red Sea. The first stage of the Israel–Hamas ceasefire has already encouraged carriers such as CULines to resume Suez Canal transits, though most operators remain cautious pending sustained security stability. Once fully restored, Red Sea routes could release significant capacity back into the global network, amplifying current downward pressure on rates.

Written: Farid Muzaffar