The transpacific Trump bump was always going to end and so it has come to pass. With Chinese exporters in the cross-hairs, a box loading in Shanghai today no longer can arrive in the US before April 2, the date Trump has designated ‘Liberation Day’ when he will impose as yet unspecified extra tariffs on imports.
The freight rate for shipping a feu from Shanghai to Los Angeles plunged in March, down by half in four weeks as of March 21, at $2,238, including a 7% fall in the last seven days. On the all-water service via Panama to the US east coast, rates are down by 41% over the four weeks to March 21, at $3,343, a level last seen in early January 2024. The potential for future disruption remains severe, following Trump’s repeated assertions on March 4 (after Hutchison sold its ports to BlackRock) that the US will take control of the Panama Canal, to add to its new imperial domains of Canada, Greenland, Gaza, bits of Ukraine and maybe even the UK.
The Asia-Europe freight rate has halved during 2025
Liner companies are turning their attention to the proposed increase in US port charges for Chinese built, owned or operated container ships. The charges will hit smaller ships harder, so the independent operators who have been running sub-panamax vessels on cut-price transpacific voyages will presumably reposition any Chinese tonnage to other routes. The charges per port call for COSCO vessels in the trade will be high enough to make the voyage uneconomic. The consequence could include reduced tonnage on transpacific services to the US, more port calls in Canada and Mexico instead, and higher freight rates. These unintended consequences will surely lead to further UPPER CASE YELLING in tweets from 1600 Pennsylvania Avenue, Washington DC.
As Israel’s Gaza ceasefire ends and the Houthis and the US return to hostilities in the Red Sea, it is becoming clear that the Suez Canal route from Asia to Europe remains effectively closed. Liner companies may actually be relieved as the extra sailing time round the Cape of Good Hope soaks up surplus tonnage deployed on the route. As we reported last month, the newbuilding frenzy in liner shipping continues as owners continue to renew fleets to meet future environmental benchmarks and regulations.
Meanwhile, the Asia-Europe freight rate has halved during 2025, collapsing from $5,558 on January 3 to $2,565 on March 21. The Asia-Med rate has fallen less, reflecting longer voyage times, but is still down from $5,630 at the start of 2025 to $3,259 on March 21, including a 14% fall since March 14, the biggest weekly drop since April last year.
In the Atlantic, rates from Europe to the US east coast remain flat at $2,130 per feu, while the rate on the reverse route was unchanged on the week to March 21 at $547 per feu but down 13% over four weeks. Transatlantic trade is heading for massive disruption as Trump asserts that the EU was formed “for the sole purpose of taking advantage of the United States” and that if the EU tries to fight back against his tariffs by refusing to import US goods, “we just go cold turkey; we don’t buy anymore. And if that happens, we win.” And lose billions in US exports to the EU as well, but that isn’t part of the logic.
In addition to the EU ETS and proposed US port fees, liner shipping faces increased charges for environmental management. Even tiny amounts of soil adhering to shipping containers can contain potentially invasive bacteria, viruses or insects. The Sea Container Focus Group, established to work on solutions to invasive species hitch-hiking on shipping containers, says that the problem is causing billion so of dollars of financial losses globally. Its chair, Gregory Wolf, claims that infestations of pests and disease could “wreak devastation on regional ecosystems” before identification and remedial action can be taken.
According to the Freightos Global Average of containerised freight rates, the world-wide average cost of shipping a 40 foot container stood at $2,094 on March 21. That is a 6% reduction on a week previously, a 31% reduction on four weeks previously, and 51% lower than at the beginning of 2025. If there is a global average of container shipping costs covering ports, environmental costs and tariffs, it is surely going in the other direction. In the end, the biggest importers (hello US) will end up burdening the largest proportion of the increase.
Energy News Beat