Transpacific box rates lose steam as carriers undercut for cargo

TRANSPACIFIC spot freight rates have quickly come off the boil after their recent eruption, with carriers already slashing prices to as low as $4,000 per feu while scrambling to capture cargo volumes.

While the Shanghai Containerized Freight Index still showcases strong spikes, industry sources revealed fake rates to the US west coast have now retreated below $5,000 — lagging behind the capacity deluge hitting one of the world’s busiest deepsea trades.

The SCFI published last Friday showed Shanghai-US west coast and US east coast rates gain another 8.4% and 11.1% respectively to $5,606 per feu and $6,939 per feu, following record jumps the previous week.

The index reflects the spot market freight rates offered from Shanghai to major destinations, showing the mainstream prices carriers quote to customers for the next week.

However, forwarding sources in China said liners have already marked down the offers to USWC as even the price of around $5,100 is struggling to attract cargo.

“Spot rates have already peaked and are below $5,000 to Los Angeles,” said Linerlytica co-founder Hua Joo Tan. “It’s due to too much capacity added too quickly.”

After Beijing and Washington reached a temporary tariff reduction pact a month ago, the backlog of China exports to the US rapidly cleared as rates surged. This was followed swiftly by capacity growth on the trade.

Linerlytica estimated last week that average weekly transpacific capacity would exceed 560,000 teu in June/July, versus just 450,000 teu in April/May.

This includes extra tonnage from smaller rivals such as KMTC, CULines and SeaLead returning to the long-haul run, alongside mainline carriers.

According to analysts SeaIntelligence, these “opportunistic” carriers increased their share of weekly Asia–North America west coast capacity from 7% in January 2024 to 13% by May 2025 — nearly doubling their market presence in just 18 months.

Rates quoted by such players are as low as $4,000 per feu, intensifying competition, as cargo volumes appear also to be losing momentum,

said a Shenzhen-based forwarder on the route.

Major carriers have been forced to give some big forwarders preferential rates by trimming peak season surcharges, effectively reducing headline freight pricing, he added.

“We think transpacific rates could rollover if US cargo volumes soften and lag such capacity addition,” noted HSBC in a report on Monday.

“While congestion is rising in China and Europe, we expect some bottlenecks when Asia shipments reach the US in coming weeks,” it added, suggesting this could buttress the market.

However, Tan said some extra loaders have already been cancelled post-rate drop, limiting potential US port congestion levels in late-June when ships from China will concentrate arrivals.

He predicts rates will continue to slide “until the next TACO (Trump Always Chickens Out) deal.”

Senior US and Chinese officials are holding a new round of trade talks in London on Monday aimed at finding a longer-term resolution to the dispute between the world’s two biggest economies.

Tan agrees either an extended 90-day grace period or further tariff cuts from the negotiations could spur another frontloading wave. “But such surges will not be sustainable,” he added.

Vespucci Maritime chief executive Lars Jensen, however, argued that if a Sino-US trade deal is reached and tariffs are not too onerous, there may be a temporary drop in container demand as a result of the current frontloading, the extent of which remains difficult to determine at this stage.

“If tariffs come back on at full effect we will see another sharp drop in container demand,” he said in an online post.

Lloyd's List Daily Briefing 10 June 2025

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