Ocean freight rates are poised for a significant increase in the coming weeks following a temporary easing of trade tensions between the United States and China. After both nations agreed to a 90-day suspension of retaliatory tariffs, retailers and logistics experts anticipate a surge in shipping demand—especially for ocean freight. Importers are expected to fast-track their shipments to avoid a possible reinstatement of higher tariffs after the truce period ends.
Importers Rushing to Beat the Tariff Clock
The trade truce has created a narrow window of opportunity for businesses to move large volumes of goods. Paul Brashier, Vice President at ITS Logistics, told CNBC that his clients have “thousands of containers ready to leave China for the U.S.” He expects a wave of containerized cargo to hit ports over the next 4–6 weeks.
Brashier emphasized that the 90-day delay in tariff hikes—agreed upon after negotiations in Switzerland—offers companies a critical planning period. “It’s a vital time for businesses to reconfigure their supply chains away from China,” he noted.
Under the agreement, China will reduce tariffs on U.S. goods from 125% to 10%, while the U.S. will lower tariffs on Chinese imports to 30%. However, 20% of those U.S. tariffs relate to fentanyl-linked policies and will remain in place.
Tariff Suspension Sparks Surge in Ocean Shipping
Bruce Kaminstein, founder and former CEO of cleaning product brand Casabella, commented: “The 30% tariff reprieve is restarting the flow of goods for small businesses. Many were stuck due to the unpredictable trade policy. Now, they’ll take advantage of the temporary relief.”
Judah Levine, head of research at logistics platform Freightos, pointed out that even when tariffs were 20% last year, import volumes soared. “U.S. seaborne imports rose 11% year-over-year in March and April,” he said. “With tariffs now reduced to 30%, we expect importers to ramp up again before rates possibly rise in August.”
Ocean Freight Rates Could Skyrocket by 40%
The sudden surge in shipping demand is likely to drive ocean freight rates up significantly. Rick Muskat, Chairman of footwear retailer Deer Stags, warned: “Our logistics costs may rise nearly 40%. That means we’ll need to raise retail prices for fall shipments.”
As importers prepare for the end-of-year shopping season, the pressure to ship early is intensifying. Most holiday-related goods must depart Chinese ports by August or September, leaving little time for indecision. “No one can predict what will happen after the 90 days,” Muskat noted.
Trade War Fallout Still Hurting U.S. Businesses
The effects of the ongoing trade dispute are still being felt. Muskat’s company recently had a shipment subject to 145% tariffs held in a bonded warehouse to avoid paying the excessive tax. “Now, we’ll release the goods and absorb a completely unnecessary $10,000 in costs,” he said.
Kaminstein explained that consumer goods companies typically operate on gross margins of just 40–50%, so a 30% tariff can be severely damaging. Alan Baer, CEO of OL USA, added: “For many importers, even a 30% tariff can make their products unprofitable. With increased cargo volumes, getting space on vessels and managing rising ocean freight rates are becoming serious challenges.”
Carrier Capacity Shrinking as Demand Returns
Shipping capacity is another growing concern. According to four-week rolling data from Xeneta, trans-Pacific cargo capacity from China to the U.S. West Coast has declined by 17% since April 20. At the same time, blank sailings—cancelled trips—have jumped by 86%.
Peter Sand, Chief Analyst at Xeneta, said the resurgence in demand will directly influence ocean freight rates. “We could see ocean freight rates from China to the U.S. West Coast rise by as much as 20% in the short term,” he warned. While rates have dropped significantly this year—down 56% to the West Coast and 48% to the East Coast—he expects a rebound due to the current shipping rush.
Ports Brace for Volume Spike
U.S. ports are already preparing for the potential influx. Stephen Edwards, CEO of the Port of Virginia, said his team is modeling various scenarios, using tools developed during the pandemic, the Panama Canal drought, and Red Sea disruptions. “We’re gearing up for what could be a sudden and sharp rise in inbound container traffic from China,” he explained.
Long-Term Uncertainty Persists Despite Short-Term Relief
Matthew Shay, CEO of the National Retail Federation, called the tariff pause a “crucial first step” that gives retailers and other businesses temporary relief heading into the holiday season. He added that the truce lays the groundwork for more constructive trade negotiations, not just with China but with other global partners.
Still, not everyone is convinced the situation will improve long term. Adoniro Cestar, Head of Trade and Capital Operations Solutions at Citi, said companies are likely to remain cautious. “Just like during COVID-19, regardless of short-term relief, firms will double down on risk management strategies to prepare for future tariff instability,” he said.
Conclusion: Prepare Now for a Surge in Ocean Freight Rates
With the U.S.–China tariff truce in place for just 90 days, importers are in a race against time. The result? A likely surge in ocean freight rates driven by limited vessel space, higher demand, and global supply chain recalibrations. Businesses that want to stay competitive should act fast—securing shipping slots early, negotiating rates proactively, and reevaluating their logistics strategies before the window closes.
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Source: VnEconomy
