Despite high hopes, recent trade negotiations between the US and its global partners have failed to breathe new life into the struggling ocean freight sector. As freight rates continue their downward spiral, the global shipping industry faces a stark reality: diplomatic headlines aren’t translating into economic recovery on the seas.
Diminishing Rates and Fading Optimism
Industry data shows a sharp downturn in spot rates on key ocean trade lanes. From early June, average spot prices from China to the US West Coast have plunged by 59%, landing at $2,268 per FEU (40-foot equivalent unit). On the US East Coast, a similar story unfolds, with rates dropping 43% to $3,796 per FEU.
Meanwhile, the North Europe to US East Coast route, (vital for many UK exporters) has seen a more modest dip of 5% since June. However, when compared to January figures, that still represents a substantial 25% drop, with current rates hovering around $2,000 per FEU.
Trade Policy: Not the Lifeline Many Hoped For
Hopes were high that the EU-US tariff agreement and ongoing US-China negotiations might deliver some stability to the market. But analysts warn that these developments, while significant diplomatically, are unlikely to reverse the fundamental issues plaguing global shipping.
A 15% tariff on imports from the EU may not be as damaging as feared, but it still represents a cost burden for shippers. US-China talks in Stockholm have made little practical progress toward easing the import expense caused by Trump-era tariffs, measures that continue to weigh heavily on transpacific trade.
“We mustn’t confuse trade negotiations with trade solutions,” says Emily Stausbøll, Senior Shipping Analyst at Xeneta. “Even the most optimistic shippers must face up to the reality of US trade policy: any savings made from falling rates are quickly overshadowed by the reintroduced or lingering tariffs.”
The Carriers’ Dilemma: Capacity vs Demand
With demand subdued and rates free-falling, carriers are scrambling to maintain viability. Many have already pulled capacity on US trade lanes in an attempt to prop up prices. But against a backdrop of fleet overcapacity, the legacy of pandemic era vessel orders, their efforts may not be enough.
Stausbøll adds, “Shippers frontloaded their imports in April and May when tariffs were temporarily reduced. That cargo rush has ended. What we’re seeing now is the sharp drop off from that artificial spike in demand.”
Even recent measures to withhold tonnage have only modestly slowed the rate decline, suggesting the industry may face an extended period of price instability.
What This Means for UK Businesses
For British businesses relying on imports or exports to and from the US or Far East, this turbulent landscape brings uncertainty, and risk. The lower freight rates may sound appealing, but they come with strings attached: unreliable shipping schedules, volatile demand, and the ongoing impact of tariffs that chip away at profit margins.
Moreover, companies that move goods through the UK’s major ports may be impacted by broader knock on effects in the global supply chain, including port congestion, reduced sailing frequencies, and longer lead times.
Hawley Logistics: A Steady Hand in Rough Waters
While geopolitical forces and macroeconomic trends remain outside any one business’s control, how a company responds to these changes is critical. That’s where a trusted logistics partner like Hawley Logistics comes in.
Our team stays ahead of market shifts, actively monitoring spot rates, carrier behaviour, and policy developments. We help clients strategically plan shipments, navigate customs complexities, and make informed choices around modal shifts, timing, and warehousing.
At a time when the ocean freight market is anything but predictable, having a supply chain partner that’s agile, informed, and deeply connected to the freight landscape is more valuable than ever.
Whether you’re dealing with reduced carrier capacity, navigating post tariff negotiations, or just trying to protect your bottom line, Hawley Logistics is here to help keep your business moving – smoothly, smartly, and securely. Contact us to discuss your needs.
