Major container shipping lines are pushing for spot rates on shipments from China to the US West Coast that are more than double current levels, aiming to capitalize on a surge in demand sparked by a temporary easing of US tariffs on Chinese goods.

Spot rates have already started rising following Monday’s announcement of a 90-day pause on the highest US tariffs. Carriers are preparing to implement general rate increases (GRIs) and peak season surcharges (PSSs) on June 1, which could push spot rates to around $6,000 per 40-foot container (FEU) to the West Coast and $7,000 per FEU to the East Coast. GRIs apply to all shippers, while PSSs primarily impact smaller shippers without carrier contracts that exclude such surcharges.

The market seems to be moving in favor of the carriers. Hapag-Lloyd reported a 50% increase in bookings from China to the US this week, while some forwarders have seen bookings double. The temporary nature of the tariff pause and the looming fall and holiday retail season are prompting importers to rush their orders before tariffs potentially return to previous levels.

“This feels like a repeat of 2024,” said Benton Kauffman, head of trans-Pacific logistics at DSV, referencing last summer’s spot rate surge to over $8,000 per FEU during tense dockworker contract negotiations.

As of Wednesday, average spot rates from Asia to the West Coast had climbed to $2,567 per FEU—up from $1,600 in late March. Rates to the East Coast increased to $3,567 per FEU, up from $2,600 over the same period, according to Platts, part of S&P Global. In July of last year, spot rates peaked at $8,133 to the West Coast and $10,133 to the East Coast.

Several major carriers, including Hapag-Lloyd, MSC, CMA CGM, Ocean Network Express (ONE), and Zim, have filed rate increases to $6,000 per FEU starting June 1. Another round of increases—up to $8,000 per FEU—is expected by June 15, according to carrier notices.

Still, the real test will come in June. “These are just filings,” one forwarder said anonymously. “We’ll see what actually sticks once we reach those dates.”

The increase in rates is driven by a sudden spike in demand following a US-China agreement that temporarily reduces tariffs on Chinese goods from 145% to 30%.

“There’s definitely been a ramp-up in orders,” said Robert Khachatryan, CEO of Freight Right Global Logistics. Importers, he noted, are moving quickly to get cargo into the US while the lower tariff remains in effect—uncertain whether a longer-term deal will be reached after 90 days.

John Pace, senior global logistics manager at outdoor apparel importer Revelyst, said his company had paused purchase orders from China in April due to the high tariffs. Now, with the temporary cut in place, they’re prioritizing ready-to-ship goods, while factories begin scaling up for additional shipments.

A carrier executive speaking anonymously confirmed that many Chinese factories had slowed or paused production following the tariff hike in April but did not fully shut down. As a result, they’re able to quickly ramp up production again.

“Importers are frontloading shipments now in case tariffs return in August,” the executive said.

Still, forwarders and importers alike warn that the proposed increases in shipping rates and surcharges could offset much of the cost savings they expected from the reduced tariffs.

“We’re being cautious,” said Pace. “Freight rates are definitely influencing our decisions right now.”

Source: joc.com