The Merchant · n°147 · May 22, 2025

Tariff truce sends Trans-Pacific spot rates surging

🚢 The new GRI has arrived!
🇫🇷 CMA CGM rides the wave.
✈️ Still no takeoff

Figure of the week

30% China-US air freight capacity fell by nearly a third between the effective removal of the de minimis exemption on May 2 and the relative easing of this past May 13.

Quote of the week

“There is a new government that, hopefully, will succeed.” Donald Trump announcing on Wednesday, May 14 in Riyadh that the United States was suspending its sanctions against Syria.

GRI in sight!

The 90-day trade truce decided by the United States and China last week triggered a sudden frenzy on trans-Pacific lines. Since the announcement of tariff relief, bookings to the United States have surged: barely two days after the White House announcements, Hapag-Lloyd was already citing a 50% increase. Other carriers observed a doubling of demand. In short, for Robert Khachatryan, head of Freight Right Global Logistics, “everyone is looking to get their goods out before a possible return of surcharges in August.” In other words, this frenzy is a marker of the persistent uncertainty among ocean freight professionals.

In this context, the main carriers - CMA CGM, MSC, Hapag-Lloyd, ONE, Zim - notified general rate increases (GRI) as of June 1. A second increase is planned for mid-June. According to Sea-Intelligence, these increases are the consequence of demand under strong pressure. Its rise is estimated at between +16% and +48% depending on the share of surplus volumes stored in China that would be shipped. Ruben Huber, founder of OceanX, even speaks of “an early peak season.” This would be strongly cyclical since it was triggered by the window of stability opened by the Sino-American agreement.

Faced with this sudden influx, carriers are logically redeploying capacity toward China-United States routes. Maersk announces it has assigned larger vessels, while the Premier alliance is relaunching a suspended line between China and the United States. In parallel, capacity on Asia-Europe lines remains broadly stable. It could even decline in the coming months. Indeed, carriers are maintaining blank sailings toward Northern Europe: freight capacity there could drop by 10% in June according to Sea-Intelligence. The current dynamic of trans-Pacific routes is rapidly reshaping global maritime transport balances. It remains to be seen how long this will last.

Knowing how to navigate rough waters

In a difficult geopolitical context, the French carrier CMA CGM is showing real resilience. Last Friday, the Marseille-based group announced its results for the first quarter of 2025. It saw its revenue climb by 12.1%, to $13.26 billion, and its net profit jump to $1.12 billion, compared with $785 million a year earlier. Other figures make it possible to gauge the group’s good health. Its shipping division, in line with the sector’s global growth (+4.2%), transported 5.85 million TEU containers, with sharply rising profitability. Average revenue per container climbed by 7.1%.

Faced with the multiple upheavals currently affecting international trade - Red Sea attacks, which have just taken a new turn with the Houthis’ announcement of a “blockade” on the port of Haifa; customs uncertainties; trade war with China - CMA CGM intends to redeploy its fleet to avoid the increase in port calls on China-built vessels. Management is also betting on operational flexibility, cost control and a diversification of activities - logistics, air freight, media - to limit risks. In short, the group displays a clear line: maintaining its competitiveness through technological innovation, notably via AI, and strengthening its positions in growth markets (United States, India, Turkey). “In an unstable context, we delivered a solid performance,” summarized Rodolphe Saadé.

Air freight in the doldrums

In the climate of instability created by the successive - and often contradictory - decisions of the US administration, professionals in the air sector are favoring the spot market over long-term contracts. Brandon Fried, executive director of the Air Forwarders’ Association, speaks unambiguously: “No one knows what may come out of the White House in 90 days.” In this context, some customers still agree to sign 30-day contracts, but annual commitments appear too risky. The suspension of customs surcharges is indeed pushing players to avoid any structural commitment that could backfire on them if the Sino-American negotiations were to fail. Once bitten, twice shy… Especially since Congress could definitively abolish de minimis in 2027.

Faced with tariff uncertainty and flow volatility, behaviors vary depending on the customer. “We are seeing the whole range of reactions,” says Stephanie Abeler, vice president Americas at Lufthansa Cargo. She speaks both of wait-and-see strategies and urgent charters. In this context, everyone is watching the negotiations between the United States and China. And Brandon Fried concludes: “If you remove de minimis and raise customs tariffs, demand will collapse. I wish the president understood that - but maybe that’s part of the strategy.”

A tugboat at the forefront of decarbonization

The port of Antwerp-Bruges inaugurated the Volta 1. It is Europe’s first 100% electric tugboat. Its unveiling is part of a carbon-neutrality strategy planned for 2050. Designed by Damen, it is equipped with a 2,782 MWh battery offering 12 hours of autonomy and a towing capacity equivalent to that of a diesel vessel. This commissioning is accompanied by five other high-efficiency RSD (Reversed Stern Drive) units. The aim is to thoroughly renew a tugboat fleet responsible for 85% of the port’s emissions. After unveiling the Hydrotug (hydrogen-powered) and the Methatug (methanol-powered), Antwerp-Bruges continues to position itself as a key player in the green transition of European ports.

👋 See you next week, The Merchant team

Sources

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