Recently, freight rates in the shipping market have shown different trends. The U.S. West route has seen continuous freight rate declines due to a large number of extra sailings flooding in to reap high freight rates, with the minimum market freight rate for the U.S. Southwest route breaking below $3,000, reaching the $2,000 range; the U.S. East route has seen smaller freight rate adjustments due to fewer extra sailings; the Europe route has seen freight rates rise this week due to factors such as reduced capacity and port congestion.

**U.S. West Route: Extra Sailings Compete for Cargo, Freight Rates Break Below $3,000 Threshold**

A large number of container ships have flocked to the U.S. Southwest route, attempting to share in the high freight rate market, directly dragging down freight rates. This week, the minimum market freight rate for the U.S. Southwest route has broken below $3,000, entering the $2,000 range. Many freight forwarders said that although cargo volume since June has increased compared to May, it has not met expectations. Meanwhile, excessive extra sailings competing for cargo give customers with large cargo volumes bargaining power. Currently, the freight rate for most U.S. Southwest routes is about $2,950 – $3,000 per 40-foot container, expected to decrease by about $100 next week.

Shipping companies are optimistic about the 90-day tariff window between China and the U.S., with Chinese factories rushing to ship goods and U.S. buyers rushing to import, thus increasing investment in the U.S. West route. In addition to opening extra sailings, there are also resumed and new routes. In June, shipping companies added 20 extra voyages for ships departing Asia for the U.S. Southwest. Among them, Evergreen from the Ocean Alliance added about 10 voyages, the most; Yang Ming from the PA Alliance added about 5 voyages; independent shipping companies like Wan Hai and SeaLead each added about 5 voyages.

 In terms of resumes and new routes, it is estimated that there are at least 6. Resumed routes include MSC’s Orient route, the PA Alliance’s PSW5 route, Zim’s ZX2 route, etc.; new routes include the Trans-Pacific West Coast route newly opened by Zhonglian Shipping, and the U.S. West route jointly operated by Korea Marine Transport joining TS Lines and Singapore Sea Lead Shipping, etc.

However, cargo volume data is not optimistic. According to Vizion, a data company, the booking volume for the China-U.S. route from June 2-8 decreased by 33% compared to the week when reciprocal tariffs were canceled (May 12-18), and was also about 10% lower than the same period last year. The industry believes that with the U.S. still imposing high tariffs on China, Sino-U.S. maritime trade is difficult to return to normal, especially for low-value goods. If Chinese factories need to ship goods to the U.S. before the tariff exemption deadline on August 14, cargo owners need to complete loading by mid-July.

U.S. East Route: Fewer Extra Sailings, Small Freight Rate Adjustments

Different from the U.S. West route, the U.S. East route has seen smaller freight rate adjustments due to fewer extra sailings. Currently, the freight rate for the U.S. East route is maintained at about $5,500 per 40-foot container, possibly with a small correction next week.

Europe Route: Reduced Capacity and Port Congestion Lead to Freight Rate Increase

This week, the freight rate for the Europe route increased by $300-500 per 40-foot container, reaching about $2,800-3,200. The reasons are reduced capacity due to some ships diverting to the U.S. route, coupled with port congestion and other factors.

 A report released by HSBC Global Research 指出 (pointed out) that when capacity rises and demand slows, freight rates may face further pressure as capacity will exceed demand. On June 13, conflicts between Israel and Iran intensified, and tensions in the Middle East escalated. In the short term, the possibility of ships returning to the Red Sea is low, but this may not alleviate concerns about a significant expansion of capacity in the Pacific region.

According to Linerlytica, a shipping consulting company, capacity on the Southwest route to the U.S. West Coast increased by 22%, and carriers have successively reduced freight rates this week, especially on the U.S. West route. FlexPort, a U.S. freight forwarding company, pointed out that new order volume has slowed down since early June. The National Retail Federation still expects U.S. container imports to decline year-on-year from May to August, with imports expected to drop sharply for the rest of the year.