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The Merchant · n°175 · January 15, 2026

How Trans-Pacific spike might affect contract talks

Figure of the week

66 The United States has announced it will withdraw from or cease participation in 66 international organizations and agreements that it says conflict with national interests. Analysts fear the withdrawal could have-term implications for global logistics markets and increase the difficulty of doing business for US shippers.

Quote of the week

“The last time we played this game, we ended up with tariff levels at 145%.” Deborah Elms, head of trade policy at the Hinrich Foundation, warned that the Trump administration’s threats of a 25% tariff rate increase on China would likely be perceived by Beijing as “a massive escalation” and could provoke reprisals.

New Iran sanctions could put China deal at risk

Any hope that the storm of tariffs emanating from the Trump administration had passed evaporated this week when President Donald Trump threatened to impose 25% tariffs on countries doing business with Iran . The threat is widely considered to be aimed at China, Tehran’s largest trading partner. China immediately issued a statement saying it would take all necessary measures to defend its interests. Analysts are now fearing a new round of tit-for-tat trade restrictions, which could upend the US-China trade deal. Given the rising tensions in Iran, the latest flash point for global supply chains appears to be the Strait of Hormuz. But analysts are split on how much any US military intervention in the Middle East would affect container freight. President Donald Trump has warned Tehran that any lethal force against protesters could meet a US military response. This provoked Iran to issue counter-threats against shipping interests in the Strait of Hormuz. Many details around the tariffs, which trump said would go into force immediately, remained unclear. Freightos head of research Judah Levine said he considered a full blockade of the Strait of Hormuz to be unlikely. Even if it took place, it would only affect between 2% and 3% of global container volumes, he said. A more serious knock-on effect of such a blockade would be cutting access to the port of Jebel Ali, the region’s most important ocean transshipment hub. But even if this were to take place, the likely result would be temporary congestion and pressure on rates, rather than a systemic shock. Vespucci Maritime CEO Lars Jensen said that if the US were to launch military action and achieve regime change in Iran, that could lead to a swift return to Suez Canal routings. “Regime change in Tehran would likely lead to a significant drop in support for the Houthis,” he said. In addition, this could end sanctions on the country, opening a path for many more container lines to tap into a market of 90 million people with direct services. Given the Trump administration’s willingness to use force, or the threat of it, shippers should not rule out other sources of supply chain disruption emerging in 2026. For now, the potential of Chinese retaliation to the latest round of Trump tariffs and the collapse of the painfully negotiated Sino-American trade deal is more than enough to be worried about .

Shippers hold upper hand in air freight contract talks

Shippers are likely to have the upper hand over airlines on air cargo spot and contract rates in 2026, according to many analysts. With many expecting cheaper and more reliable ocean freight this year, more volumes are likely to make a modal shift to sea. The second half of 2025 already saw this pattern emerging. Airlines benefited from higher-than-expected volumes in the early part of the year as importers front-loaded freight to avoid incoming tariffs, but in the second half rates began to even out. For 2026, Xeneta is predicting global air cargo volumes to rise by between 2% and 3%, compared with 4% for 2025. Niall van de Wouw, chief air freight officer at Xeneta, said he thought it was likely that “this year we will see something that will put a stopper on the level of air freight growth seen over the last two years.” One trend that is likely to remain strong is short-term contracting behavior. In Q4, one-year contracts accounted for just 24% of new deals. Shippers increasingly looked for shorter-term contracts and appeared unwilling to lock in rates over a full 12 months. “Overall, the market has been relatively stable, but we are entering a phase when shippers will be looking for better rates, and demand may deteriorate in the first quarter,” said van de Wouw. On the upside, AI and e-commerce cargo demand is continuing to prove resilient between Asia and North America. However, much depends on the level of tariff risk seen in 2026. The Trump administration this week proved it is still willing to use tariffs as a weapon, with President Donald Trump announcing he would impose an additional 25% tariff on goods coming from any country that continues to do business with Iran. The imposition of new tariffs on Chinese goods coming into the US and the potential collapse of the US-China trade deal could hurt overall freight volumes but increase the unpredictability of ocean freight. There is also the question of how the Supreme Court will rule on the administration’s existing tariff policy. Of course, any return to Red Sea routings would considerably increase the reliability and cost-effectiveness of ocean freight transport. For now, shippers are in a relatively advantageous position, but 2026 promises many supply chain surprises.

How Trans-Pacific spike might affect contract talks

The pre-Lunar New Year period has seen sharply rising Trans-Pacific eastbound spot rates but the bigger question many analysts and shippers are asking is what this is likely to mean for rates throughout 2026. The traditional seasonal rush of US imports before the closure of Chinese factories for the annual holiday could provide vital clues about how the Trans-Pacific will develop over the next 12 months. Nevertheless, analysts and industry insiders are split on what the current surge will mean for longer-term rates. Those who were most pessimistic about demand in recent months can at least take some comfort from the fact that a surge took place at all. There were predictions that depressed consumer demand and full inventories meant there would be no traditional seasonal spike. In fact, Drewry has registered double-digit increases on Asia–North America trades. “A traditional pre-Lunar New Year cargo rush is a key driver behind dramatic increases in spot rates out of the Far East, up almost 60% into the US West Coast compared with a month ago,” said Xeneta chief analyst Peter Sand. “The recent increases are dramatic, particularly into the US.” Backing up this sense of optimism are the latest NRF Global Port Tracker figures, which show the first month-on-month gain in import volumes in six months. However, the NRF also noted that year-on-year import volumes were down compared with 2025. “There should be a brief bump in imports this month, ahead of Lunar New Year factory shutdowns in Asia, but we’re otherwise headed into the post-holiday shopping lull that comes each year,” said NRF vice president for supply chain Jonathan Gold. According to forecasts from the ports of Los Angeles and Long Beach, import volumes are set to peak during the weeks of Jan. 4 and Jan. 11, then drop over the subsequent three weeks for a normal seasonal lull before returning to higher levels in mid-February. A likely limiting factor on the surge is that importers are filling current orders but not pulling forward inventory, given tariff uncertainty. The pending Supreme Court judgment on the Trump administration’s tariffs is adding to the wait-and-see approach, with judges likely to release their verdict in mid-January. In terms of rates, shippers may see some increases over coming weeks, but while carriers’ GRIs implemented in the final months of 2025 largely held up, the Jan. 1 GRI has fallen relatively flat. Sand also warned shippers not to undersell themselves when entering long-term contract negotiations due to the spike. He said the rest of 2026 was likely to see relatively flat demand.

🤔 Did you know ?

Seasonal fog at the Port of Houston has led to a series of vessels being diverted to Mobile, Alabama. Shippers are calling on authorities to provide more notice of the diversions, which reverse the typical port rotations for Gulf Coast services.

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👋 See you next week, The Merchant team

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