Freightos Baltic: Transpacific and Asia–Europe freight rates rebound on renewed optimism and tighter capacity

Freightos Baltic: Transpacific and Asia–Europe freight rates rebound on renewed optimism and tighter capacity

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Container freight rates across major East–West trades surged last week, driven by renewed optimism over US–China trade relations and tightened carrier capacity. The price rebound was largely supported by two key factors: improving trade sentiment following high-level talks between US and Chinese officials in Malaysia, and capacity constraints resulting from an uptick in blank sailings. The meetings reportedly brought the two sides closer on contentious issues ahead of the Trump–Xi summit in South Korea, fuelling expectations that existing tariff levels may be extended—or even reduced—if progress is made on fentanyl-related measures and port fee adjustments. This optimism has encouraged traders and shippers to secure space early, tightening spot availability and lifting rates across the board.

At the same time, heightened cost pressures from newly introduced US port call fees for Chinese vessels—estimated at nearly $42 million last week alone—added to the upward push in freight costs. On the other hand, reciprocal action by China has resulted in a bulk of US vessels waiting off the coasts for a rule change, signalling growing operational frictions that could ripple through supply chains.

Beyond the US–China dynamic, President Donald Trump’s Far East tour yielded new trade frameworks with Malaysia, Cambodia, Vietnam, and Thailand, all featuring a 20% baseline tariff on exports to the US with selective exemptions in exchange for market access and investment commitments. These moves reinforced expectations of shifting regional trade flows and potential rerouting of cargoes, adding to near-term demand volatility.

However, sentiment was tempered by the collapse of talks with Canada, after which Trump announced a 10% tariff hike on Canadian exports—an unwelcome development that could complicate North American trade balances and redirect transpacific volumes.

Despite a seasonal lull, effective capacity management and a sharp rise in blanked sailings have helped carriers maintain pricing discipline. The latest rate increases return spot levels to roughly mid-September highs, when a brief GRI-led rebound was last observed. With prices now well above October 2023 levels, and after nearly touching pre–Red Sea crisis lows earlier this month, carriers are expected to introduce fresh GRIs in early November. Their success, however, will again hinge on how tightly capacity is managed in the coming weeks.

Written: Farid Muzaffar