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Global ocean freight markets diverged sharply this week, with transpacific spot rates continuing their rapid descent amid waning demand and record-high capacity, while Asia–Europe routes posted moderate gains, underpinned by seasonal demand and port congestion.

On Monday, the US government announced an extension of the reciprocal tariffs pause, shifting the implementation date from 9 July to 1 August. Letters sent to 14 trading partners outlined the specific tariff rates due to take effect in the coming weeks. However, the short-lived extension is unlikely to significantly affect ocean freight demand, as most importers had already frontloaded shipments ahead of the original deadline.

The transpacific market has borne the brunt of a sharp downturn in demand. Spot rates from Asia to the US West Coast tumbled 8% last week to $3,124 per FEU, with daily rates so far this week collapsing further to $2,390/FEU. This marks a dramatic 60% decline in just three weeks, and a 70% drop compared to the same period last year.

Rates to the US East Coast also weakened, though less drastically, falling 30% since mid-June to around $4,900/FEU. The more measured decline on this route likely reflects restrained capacity expansion, as many shippers prioritised West Coast ports to expedite cargo clearance ahead of the tariff window.

The latest downturn follows a short-lived rate spike triggered by initial signs of easing in China–US trade tensions. However, with the shipping window for goods arriving before the 12 August tariff deadline rapidly closing, demand has swiftly retreated. Exacerbating the decline is a surge in vessel capacity to the West Coast, now at record levels and outpacing demand—accelerating the rate erosion.

In contrast, the Asia–North Europe trade displayed greater resilience. General Rate Increases (GRIs) implemented in early July gained partial traction, lifting spot rates 14% week-on-week to $3,384/FEU. Although this remains well below the seasonal high of $8,500/FEU recorded last year, current rates are supported by firmer-than-anticipated peak season demand and continued congestion at key European ports.

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