After the Global Tariff Friction Cools Down: What's the Latest Situation of Container Shipping on the U.S. Route?

The latest data shows that after the global tariff issues have cooled down, particularly with the easing of trade relations between the two largest economies, cross-Pacific shipping trade continues to be encouraged. US-bound container shipping rates remained strong in the third week after the May 12 joint China statement, despite a gradual slowdown in container shipping bookings.

The latest report released on Thursday by maritime research and consulting firm Drewry showed that the price to transport a 40-foot equivalent unit (FEU) from Shanghai to Los Angeles recorded the largest weekly increase of the year in the week ending May 29—rising nearly 17% to $3,738.

Although the current freight rate per container is still nearly one-third lower than the peak in January this year, it is significantly higher than the low point of $2,487 at the end of March, just before Trump announced the "Liberation Day" tariffs.

Transportation data company Xeneta expects that freight rates could double in the coming weeks and may even rise higher due to the latest ruling on tariffs by the US Court of International Trade.On Wednesday, the US Court of International Trade unexpectedly ruled that Trump did not have the authority to impose a blanket of comprehensive tariffs on nearly all countries under the International Emergency Economic Powers Act (IEEPA).

Prior to this week, the surge in US-bound container shipping rates was almost entirely driven by importers rushing to place orders. After Trump increased tariffs on China to 145% in early April, many importers suspended shipments of their orders. Nathan Strang, head of ocean freight at Flexport, said that some container lines were once fully booked, with sailings scheduled as far out as July. People were operating in almost complete uncertainty, so once they saw an opportunity, they would rush to request shipments.

Balsam Brands, a US company that sells artificial Christmas trees and holiday decorations, said it will import 500 containers of Halloween decorations, Christmas trees, and ornaments from China in the coming weeks. It expects to pay approximately $1 million more in additional transportation costs compared to the average spot rate in mid-May.

However, despite the continued high container shipping rates, the tightness in container shipping bookings has at least eased somewhat.

Data from logistics technology companies Vizion and Dun & Bradstreet show that in the first three days of this week, the total number of container shipping bookings was approximately 106,000 twenty-foot equivalent units (TEUs), a decrease from the 137,000 TEUs in the same period of the previous week. Globally, the week starting May 19 was the highest booking week of the year so far.

Data tracking actual shipping over the past two weeks—which tends to lag behind container booking data in terms of changes—also shows a similar slowdown trend.Over the past 15 days, approximately 34 vessels have sailed from Chinese ports to the US, a decrease from the rolling 15-day figure of 48 vessels in the previous week. The number of containers carried by these vessels has also decreased by one-third.

"This is a constantly evolving situation," said Jayendu Krishna, Director of Drewry Maritime Services. "What we are witnessing is a continuous rebalancing between the supply chain and indicators such as freight rates, bookings, and sailings."

Meanwhile, capacity on relevant trans-Pacific routes is also beginning to recover. Major container liner companies have committed to increasing capacity, and as demand improves, smaller freight forwarders are returning to the route after years of absence. CULines is capitalizing on the sudden boom in the trans-Pacific route and will begin offering shipping services across the Pacific, connecting multiple Chinese ports with Long Beach Port in the US; South Korea's KMTC Line will also resume trans-Pacific route services after decades of absence.

China's overall trade volume remains high, with the total number of containers handled at Chinese ports last week increasing by 6% YoY, marking the 16th consecutive week of YoY growth.