Major container shipping lines are pushing for spot rates on China–US West Coast routes that more than double current levels, capitalizing on an expected surge in volumes following a temporary 90-day reduction in US tariffs on Chinese goods.
Spot rates have already begun climbing after the tariff pause was announced Monday. If carriers successfully implement general rate increases (GRIs) and peak season surcharges (PSSs) starting June 1, spot rates could rise to approximately $6,000 per 40-foot equivalent unit (FEU) to the US West Coast and $7,000 per FEU to the East Coast. GRIs apply universally to all shippers, while PSSs typically impact smaller shippers who lack carrier contracts that block such charges.
Momentum currently favors the carriers. Hapag-Lloyd reported a 50% increase in bookings from China to the US this week, while some freight forwarders observed spikes of up to 100%. With a narrow tariff window and the looming fall and holiday shipping seasons, importers are scrambling to move goods before tariffs potentially rise again.
"It's shades of 2024," said Benton Kauffman, head of trans-Pacific logistics at DSV, referencing last summer's rate spikes during contentious dockworker negotiations on the East and Gulf coasts.
As of Wednesday, Platts (an S&P Global company) reported average spot rates from Asia to the US West Coast had risen to $2,567 per FEU, up from $1,600 in late March. Rates to the East Coast increased from $2,600 to $3,567 per FEU over the same period. In July 2024, spot rates had peaked at $8,133 per FEU to the West Coast and $10,133 to the East Coast.
Carriers including Hapag-Lloyd, MSC, CMA CGM, Ocean Network Express (ONE), and Zim have filed new spot rate levels of $6,000 per FEU effective June 1. Another round of increases is planned for June 15, with Hapag-Lloyd, MSC, and CMA CGM seeking rates of $8,000 per FEU, according to carrier rate filings.
"These are just filings," noted one forwarder anonymously. "We'll see what rates are implemented when the dates arrive."
The jump in demand stems from the temporary US-China agreement, which lowered tariffs on Chinese goods from 145% to 30% for 90 days. This has prompted a rush by importers to move goods under the reduced tariff.
"There's been a ramp-up in orders during this 90-day window," said Robert Khachatryan, CEO of Freight Right Global Logistics. "Importers want to get their goods in now, in case tariffs return to previous levels after the window closes."
John Pace, senior manager of global logistics at Revelyst, said his company had paused purchase orders in April, but is now fast-tracking ready shipments as factories resume production.
A carrier executive explained that most Chinese vendors had slowed—but not stopped—production during the high-tariff period, allowing for a quick rebound. "They have to ship now in case there's another tariff increase in August," the executive said.
Source: Concord