Freight rates skyrocket: Will the momentum hold?

Container shipping rates are surging as shippers rush to move goods during a narrow reprieve in US-China trade tensions. Drewry’s World Container Index (WCI) jumped 41% last week to $3,527 per 40ft container, marking the second-largest dollar gain in the index’s history. The increase is part of a broader 70% rise over the past four weeks, driven largely by booming transpacific volumes. Attention now turns to whether the upward trend will continue, with analysts warning of a potential downturn in the latter half of the year.

Ex-China routes surge as high as 57%

Spot freight rates from China to the US West Coast rose 57% in the past week to $5,876 per 40ft container, which went up 117% since May 8. Rates to the US East Coast climbed 39% in a week to $7,164 and 96% over the past month.

Rates from China to Northwest Europe rose by 32% last week to $2,845 per 40ft container, while the South Europe route gained 38% to $4,068.

The surge coincides with a temporary detente between the US and China, after President Donald Trump paused new import tariffs. Shippers are rushing to capitalize on the 90-day window before legal uncertainties or new restrictions return.

Freightos index gains more than 50%

Freightos’ Global Container Freight Index rose drastically by 52% to $3,398 per 40ft container on June 6. China to US West Coast rates skyrocketed by 98% $5,488 per 40ft container, while US East Coast rates soared by 61% to $6,410.

Meanwhile, China to North Europe and Mediterranean routes gained 17% and 32%, respectively.

Rate hikes by carriers proved successful

Major carriers, including CMA CGM, MSC, and Hapag-Lloyd, implemented spot rate increases of $1000-$3,000 per 40ft container from June 1. Xeneta Chief Analyst Peter Sand noted that the market’s mid-high spot rates on the transpacific have jumped 88%, evidence that some shippers are accepting the sharp hikes. “Right now, it seems carriers are telling shippers to jump, and some are replying ‘how high?’,” Sand said.

Near-term outlook down despite recent surge

The temporary lifting of tariffs between the US and China has triggered a shipping rush, but the dramatic rate escalation may be short-lived. “This will not last,” Peter Sand said. “Capacity is heading back to the transpacific, and the desperation of shippers will ease once boxes are on the water and inventories build.” According to Xeneta, spot rates are expected to peak in June before softening under renewed downward pressure.

Meanwhile, Drewry expects rates to decline again in the second half of 2025 as the temporary US-China trade opening closes and structural overcapacity returns.

“The volatility and timing of rate changes will depend on the outcome of legal challenges to Trump’s tariffs and on capacity changes related to the introduction of the US penalties on Chinese ships, which are uncertain,” Drewry said.