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Stacked containers are shown as ships unload their cargo at the Port of Los Angeles in Los Angeles, California, U.S. November 22, 2021. REUTERS/Mike Blake
Container Rates Continue Five-Week Slide as Tariff Impact Fades
Drewry’s World Container Index recorded its fifth consecutive weekly decline on Thursday, dropping 2.6% as the market continues to cool following earlier tariff-driven volatility.
The downturn comes after a significant surge in rates that began in May, one month after the announcement of higher U.S. tariffs announced by President Trump in April. While rates climbed steadily through early June, the market has since reversed course, with consistent declines since mid-June indicating the tariff’s initial impact has not been sustained.
Transpacific routes showed notable weakness this week, with Shanghai-Los Angeles rates falling 4% to $2,817 per FEU and Shanghai-New York rates dropping 6% to $4,539 per FEU. Despite these declines, current rates remain elevated compared to pre-tariff levels from ten weeks ago, with Los Angeles routes still 4% higher and New York routes 24% higher than on May 8.
Drewry analysts expect the downward trend to continue, citing weak demand as a primary factor. Their Container Forecaster publication anticipates a further weakening in the supply-demand balance during the second half of 2025, which will likely drive spot rates lower.
Market uncertainty remains high, with future rate volatility dependent on two key factors: potential additional tariffs under the Trump administration and capacity changes related to the introduction of U.S. penalties targeting Chinese vessels.
This continued decline comes amid the Trump Administration’s erratic tariff policy, with “reciprocal” tariffs now delayed until August 1. The situation is further complicated by growing industry concerns about container shipping overcapacity.
In a surprise move the EU has unsanctioned two polar class heavy lift vessels, Audax and Pugnax. The vessels were purpose-built for the construction of Russia’s Yamal LNG project in 2016. They also carried the majority of prefabricated modules for the country’s other flagship LNG project, Arctic LNG 2.
Newly imposed U.S. and EU sanctions targeting Russia and its oil giants Rosneft and Lukoil have yet to disrupt physical crude shipments from the country’s western ports, according to LSEG data and market sources.
President Donald Trump’s latest tariff salvo against Canada landed just as Mark Carney was setting out on a mission to insulate his country from the fallout of the trade war.
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