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Spot container freight rates on major east–west trades continued to decline last week, with transpacific benchmarks extending an eight-week slide as tariff-driven frontloading eased and structural overcapacity weighed on the market.

According to Freightos data, Asia–US West Coast rates fell 8% to $1,940/FEU, dropping below the $2,000 threshold for the first time since the onset of the Red Sea crisis. Early this week, daily transpacific spot levels were broadly in line with late-2023 pricing, just before Houthi attacks forced widespread vessel diversions.

The correction follows a sharp rally earlier this year, triggered by the US – China 90-day tariff truce. Anticipating the August expiry of the tariff relief, shippers frontloaded volumes, briefly pushing spot rates above $6,000/FEU and pulling forward the traditional peak season into June. A Freightos survey indicated a divided market view on whether the latest 90-day extension of reduced tariffs would generate a second demand surge, but current rate trends suggest momentum is fading.

That transpacific prices have returned to pre-crisis levels despite ongoing Red Sea disruption underlines how chronic overcapacity is amplifying the downturn. The Asia–Europe trades reflect a similar dynamic: even with resilient demand, congestion across European gateways, and continued rerouting, spot prices remain 60% below year-ago levels.

As of last week, Asia–North Europe prices were flat since early July, while Asia–Mediterranean benchmarks slipped to $3,100, down from June’s $4,800 peak. Carriers are preparing to cut capacity in September to stem further erosion, though sustained downward pressure highlights how excess supply continues to overshadow seasonal demand.

Written: Farid Muzaffar