Freightos Baltic: Shippers front-load again as tariff threat lingers

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Transpacific spot rates held near seasonal highs and ticked up again this week. Asia-US West Coast pricing rose to about $7,600/FEU, matching the early-July peak and nearly $5,000 above late-May levels. East Coast rates, up a similar $5,000 over the same stretch, held near $9,000 before adding another $800 this month.

Asia-Europe rates are correcting after a steeper run-up. A $3,000-$3,500 surge had pushed Mediterranean pricing above $7,000 and North Europe to $5,800 by early July. Both have since eased: Mediterranean rates fell 15% last week to about $5,000, North Europe dropped 6% to $4,700-$5,000. Both remain well above pre-peak levels, up 15% and 60% respectively.

Demand on the transpacific has proven sturdier than expected. June's early peak-season pull came partly from fears of a July tariff hike; with tariffs holding steady and further increases still possible, shippers appear to be sustaining bookings rather than pulling back. Carrier capacity cuts and Chinese port congestion add further support.

The Panama Canal Authority has delayed a planned draft cut from September to October but kept reduced transit slots in place, and carrier canal surcharges set for September could push East Coast rates higher still. Weather-driven strain elsewhere, low Amazon water levels hitting Brazil routes and Rhine drought compounding North Europe hub congestion and Far East port backlogs, is likely helping keep Asia-Europe rates elevated despite cooling demand.

Geopolitical risk remains elevated after Washington tightened sanctions on Iran's oil buyers to pressure open the Strait of Hormuz, a move extending to China, Iran's top crude customer, with potential to strain US-China trade further. In the Red Sea, Houthi attacks continue, though MSC's move to resume southern Red Sea transits, joining other major carriers, has fed hope of a gradual return to normal traffic.

US trade policy adds further uncertainty. Talks to avert a 50% tariff on roughly $20 billion (about 5%) of Canadian exports collapsed over the weekend; the tariffs are now active, and Canada plans retaliation for September 8 alongside support for affected businesses, pointing to a prolonged standoff. Separately, Section 301 tariffs of 10-12.5% on forced-labor practices took effect once Section 122's 10% duties lapsed in late July, while USTR findings on overcapacity practices among sixteen major partners, which could restore IEEPA-level tariffs, remain unreleased. Given the two-month gap between the forced-labor findings and their implementation, a similar timeline may apply here.

Written by: Farid Muzaffar