Ocean freight rates fall due to tariffs

The US government ’s tariffs are having a major impact on global trade, reducing demand for freight. This has also put the shipping industry under great pressure, with shipping rates falling to their lowest levels since early 2024.

Hamburg, Germany’s largest seaport, is one of the places that has seen the most visible impact from the trade disruptions caused by the US tariffs. Although its activities have increased since the beginning of the year, the port has recorded a decline of nearly a quarter in trade turnover with the US.

"I think the tariff policy is a factor of uncertainty for the port of Hamburg," said Jens Meier, CEO of the Port of Hamburg, Germany. "You never know what will happen next and this is affecting the flow of goods between the US, Europe and Germany. We have seen a 24% decrease in trade with the US, although the port's overall trade is still increasing by 9.3%, thanks to the offset from trade with China and Southeast Asia."

Tariff pressure is also hitting shipping lines hard. Average spot rates for a 40-foot container on key shipping lanes fell to their lowest since early 2024 last week, reflecting weak demand, according to shipping consultancy Drewry.

Notably, freight rates from Shanghai to Los Angeles, the busiest trade route, have fallen 58% year-on-year and are well below the $2,200 a container that major carriers need to make a profit. Freight rates from Shanghai to New York have also plummeted 46%.

"For the first time since late 2023, freight rates have fallen below the break-even levels of leading carriers, putting significant pressure on their ability to maintain profitability," said Omar Nokta, shipping analyst at Jefferies Financial Services.

The tariffs are also expected to have a major impact on the prices of goods in the US, putting great pressure on people and businesses.

Mr. Tim Power - General Director, Drewry Shipping Consulting Company commented: "Increasing tariffs on products that have no domestic substitutes will only increase cost pressure on US consumers. This could lead to increased inflation in the US and reduced domestic consumer demand."

Some shipping industry experts fear that weak consumer demand will prompt retailers, which account for about half of all container shipping volume, to reduce future shipments, adding further downward pressure on freight rates, making the fourth quarter of this year the most difficult for the industry since 2023.

Source: https://vtv.vn/gia-cuoc-van-tai-bien-giam-do-thue-quan-100251007002117071.htm