The Merchant · n°140 · April 3, 2025

Tariff uncertainty stifles container shipping markets

🚢 A third GRI increase...
🛃 Major customs upheavals ahead.
✈️ A difficult Q2 on the horizon?

Figure of the week

$267,300,000 This is what each “megamax” container ship of about 24,000 TEU ordered by Evergreen costs. It would be the highest price ever negotiated for a vessel of this type.

Quote of the week

“An apocalypse for trade.” This is how one commentator described the recent announcements from the Office of the United States Trade Representative (USTR) on the sidelines of the public hearings held last week.

GRI: never two without three?

Faced with a moderate rebound in ocean freight volumes over the past few weeks, the main shipping carriers have announced a new general rate increase (GRI), effective April 15. The outcome of this attempt appears highly uncertain, as it comes after two failures since January. A sign of the persistent uncertainty among market players, the increases announced by MSC and CMA CGM are very modest. The policy of small steps prevails.

Indeed, the economic signals are more than mixed. According to Drewry, spot rates on the Shanghai-Los Angeles route are down 6% per 40-foot container. Over a year, that even represents a 35% drop! Similarly, on the Asia-North Europe route, rates have reportedly fallen another 4%, an annual decline of 25%. But not all indices detect the same trends! The Shanghai Containerised Freight Index (SCFI) notes spot rate increases, whether on the Asia-North Europe route or on transpacific journeys. Reading these discrepancies, there is plenty to feel disoriented.

These contradictions reflect a fragile economic situation, particularly because of the new American tariff measures on steel, aluminum, and automobiles, which take effect on April 2. According to Goldman Sachs, these measures could lead to a significant slowdown in the American economy, with GDP growth revised downward to 1% in 2025. For Lars Jensen, founder of Vespucci Maritime, this slowdown would weigh heavily on ocean freight volumes to the United States, leading to additional downward pressure on freight rates. In his words, “supply chains are no longer simply unpredictable, they are becoming inconceivable.” And all players are affected by this new state of affairs.

Concerns over US customs policy

The customs war continues to cause damage. After two and a half months of explosive statements, the announcement of a 25% increase in customs tariffs on imported vehicles, applicable as of April 2, marks a new escalation in tension. In Europe, Germany and Italy, major exporters to the United States, are on the front line. But they are not the only victims of these decisions, which are already affecting ocean freight.

In the United States, ports specializing in vehicles, such as Baltimore or Seattle-Tacoma, fear a drop in volumes: in 2024, 85% of the 750,000 cars that passed through Baltimore were imported. In Tacoma, a $200 million roll-on/roll-off terminal is under construction, but the recent announcements could threaten its profitability. In this climate of uncertainty, frontloading has intensified over the past two months: 33 ro-ro vessels left Europe for the United States in February, compared with 28 last year. That represents 30,000 additional vehicles, shipped to avoid future surcharges.

For Xeneta, a transport analysis firm, these customs hikes constitute one of the biggest risks to global supply chains in 2025: volume volatility, trade route diversions, and regulatory uncertainty are hampering operators’ planning. In this tense and erratic geopolitical context, it is particularly difficult to organize. In Europe, Sander van der Meer, VP at Geodis, said he anticipates modal shifts, with a move from air freight to ocean to cushion costs. Nothing says that will be enough, however. As John Manners-Bell, founder and CEO of the analysis firm Ti Insight, summed up: “Customs tariffs bite from day one, but the logistical effects will be felt over months, even years.”

A slowdown for air freight in the second quarter?

The second quarter could be gloomy in air freight. Tariff uncertainties persist for a wide variety of reasons. On the main trade routes from China, prices remain uncertain because of the major upcoming festivals, such as the Qingming Festival or the May 1 holidays for Labor Day. These events are difficult for professionals to navigate: while they generate occasional peaks, they also set up significant troughs in demand. This seasonal situation is complicated by the major congestion at Beijing airport, which causes significant delays and reinforces price volatility.

The geopolitical situation does nothing to improve this chaotic picture. Faced with the constant threat of American customs measures, many shippers are favoring short-term contracts. Under these conditions, airlines are struggling to make medium- and long-term forecasts. Confronted with a structural decline in demand from China, they are adjusting their strategies by reorienting toward the more stable intra-Asian or transatlantic markets. Without an unexpected recovery in demand or a rapid clarification of international trade policies, these tariff uncertainties could extend into the coming months.

Suffice it to say that the current fog is not about to lift anytime soon…

👋 See you next week, The Merchant team

Sources

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