Freightos Baltic: Ocean freight market extended post-peak correction amid policy volatility

The global ocean freight market extended its downward trajectory last week, though the pace of decline has slowed as carriers proactively manage capacity to cushion rates.

Spot rates from Asia to the US West Coast held steady at $2,334/FEU, while East Coast rates fell another 7% to $4,113/FEU—reflecting a market correction following an early, condensed peak season. The May surge was largely driven by frontloading, as importers rushed to beat tariff adjustments after the US reduced its baseline duty on Chinese goods from 145% to 30%.

With Washington and Beijing now in discussions to extend their current trade truce by another 90 days beyond the 12 August deadline, hopes for a more typical peak season resurgence are emerging. Yet, given the earlier wave of advance bookings, the market may have already passed its seasonal high. Even if the truce is extended, the US’s 30% tariff on Chinese imports—well above the 19–20% levied on other sourcing countries—raises the question of whether American buyers will accelerate supply chain diversification.

The freight cycle remains heavily distorted by volatile trade policy. Sudden tariff changes and uncertain deadlines have triggered erratic shipping behaviour, disrupting historical patterns. Even amid signs of stabilising trade ties, expectations are coalescing around a new normal: a sustained tariff regime of 15–20%, which is likely to prolong volatility in booking strategies through the year-end.

In Europe-bound trades, the Asia–Northern Europe lane saw a 4% decline last week to $3,419/FEU—erasing the prior week’s modest gain and bringing rates back to early July levels. Nonetheless, spot prices remain 45% higher than at end-May, buoyed by persistent congestion at major European ports. Carriers are expected to implement Peak Season Surcharges (PSSs) of around $500/FEU in August if volume strength continues and bottlenecks worsen.

Rates on the Asia-Mediterranean corridor have dropped 30% since peaking in mid-June, settling at $3,339/FEU. On a year-on-year basis, this represents a sharp 55% decline, underscoring the market impact of fleet expansions and structural overcapacity, which continue to weigh on spot pricing across key lanes.

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Written: Farid Muzaffar