Fixed Tariffs, Stronger Demand Fuel Confidence in Ocean Rate Hikes

Strong demand on the Asia–Europe ocean trade is helping to keep short-term container rates
elevated, as ocean carriers continue shifting capacity toward the trans-Pacific following the
United States’ May 12 suspension of steep tariffs on Chinese goods.

Carriers have also gained the confidence to introduce additional rate increases, citing tightening
supply–demand dynamics, according to Tom Turner, head of ocean freight for Europe, the
Middle East, and Africa at Toll Group.

Freight-all-kinds (FAK) hikes implemented on June 1 triggered a sharp rise in rates, prompting
some ocean carriers to announce further rate increases and peak season surcharges effective
June 15.

These increases are further supported by progress in U.S.–China tariff negotiations. President
Trump confirmed that total U.S. tariffs on Chinese goods now stand at 55%.
The tariffs are made up of pre-existing 25% levies on imports from China from Trump’s first term
in the White House, 20% on all Chinese imports, and a baseline 10% “reciprocal” tariff Trump
has imposed on imports from nearly all US trading partners.

The developments have offered long-awaited clarity for importers and are expected to help
preserve the fragile trade truce brokered in Geneva last May.

China, for its part, will maintain a 10% tariff on U.S. goods following last month’s rollback.
Beijing will also lift export restrictions on rare earth minerals, magnets, and other strategic
materials.

For importers, fixed tariff levels reduce uncertainty about future hikes and ease concerns over
further escalation in the short term — enabling better planning and market confidence.
With some clarity on reciprocal tariffs between the two countries, forwarders are now expected
to gain a clearer view of Asia–Europe demand heading into the second half of the year.
Several carriers announced rate hikes for Asia–North Europe shipments last month in an effort
to slow a spot market that has lost more than 60% of its value since the start of the year, due to
excess capacity and weak demand.

CMA CGM and MSC were among the carriers that raised rates to over $3,000 per FEU effective
June 1 — significantly higher than the average spot rate of $1,994/FEU recorded on May 15,
according to the Journal of Commerce.

By mid-June, rates remained elevated, supported by strong demand, longer transit times due to
southern Africa diversions, and vessel redeployments to the trans-Pacific.

Data from Platts showed that spot rates from Asia to North Europe dipped slightly to $2,800 per
FEU, while Asia–Mediterranean rates rose 3.7% to $4,500 per FEU.