Ocean rates highest in a year amid US-China trade truce

Targeted tariff relief

Washington and Beijing will reduce tariffs on about $30 billion in counterpart imports to most-favored-nation levels, subject to required legal procedures.

The changes cover nearly 80 U.S. product entries, with toys representing the biggest category by value in what some analysts see as an attempt by the Trump administration to shore up cratering polling with holiday-shopping voters ahead of the midterm elections. China’s list includes more than 1,600 entries, concentrated largely in agricultural products and commodities.

The tariff relief is modest against the more than $400 billion in annual China-U.S. trade, but it should provide some benefit for importers, retailers and consumers of the affected products. More broadly, the truce extension removes, at least temporarily, the threat of another sharp trade-policy escalation ahead of the year-end shipping and retail cycle.

Trans-Pacific rates remain elevated

Trans-Pacific container prices climbed again this past week despite expectations that demand will ease after China’s Golden Week holiday and the traditional peak-season period.

Spot rates from Asia to the U.S. West Coast rose to $8,400 per forty foot equivalent unit, a new high for the year. East Coast spot rates held at about $9,600 per FEU, roughly $200 below their late-August peak.

The persistence of high pricing reflects a capacity market shaped by blank sailings, port delays and carrier allocation controls rather than demand alone, Freightos noted. Ocean carriers have expanded blanked sailings through the holiday period and into late October, while some have reportedly reduced allocations to contracted forwarders.

Far East congestion a major factor

Sea-Intelligence estimates port delays are absorbing more than 8% of global vessel capacity and could take as long as 10 months to fully unwind. That constraint, along with higher bunker costs associated with the closure of the Strait of Hormuz, could establish a firmer floor under container rates even during periods of weaker seasonal demand.

The effect could be especially apparent in the run-up to Lunar New Year, when a higher rate baseline would leave carriers with more room to push prices upward if bookings accelerate.

Panama Canal conditions improve

Improved rainfall and water levels are providing a partial offset for shippers moving cargo from Asia to the U.S. East Coast through the Panama Canal.

The Panama Canal Authority plans to restore daily Neopanamax transits to the normal level of 10 and raise the maximum authorized draft to 49 feet in mid-October. The action reverses restrictions imposed in late August, when the authority removed one daily transit slot and reduced allowable draft by one foot.

The improvement reduces the immediate risk of additional diversions, delays and higher costs for Asia-East Coast cargo. But it may not be permanent, as an expected El Niño pattern could still weaken rainfall during the wet season, which usually continues into January, potentially requiring new operating restrictions in the coming months.

Europe prices ease, but remain well above 2025

Asia-Europe container spot rates continued to decline as demand softened and carriers gradually restored effective capacity through increased Red Sea transits.

Rates from Asia to North Europe fell 9% to about $3,400 per FEU, while Asia-Mediterranean pricing declined 7% to $3,600 per FEU. Several carriers are nevertheless seeking late-October general rate increases, an indication that lines are trying to slow the market’s downward movement.

Read more articles by Stuart Chirls here.

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