Xeneta: Freight rates set to peak in H1 June

Spot freight rates on the China-US trade are expected to reach a peak in the first half of June before easing, according to Peter Sand, Chief Analyst at Xeneta. The temporary lifting of tariffs between the US and China has triggered a shipping rush, pushing rates upward as demand surges and capacity remains tight.

“In the defence of carriers, it does take time to shift capacity back to the China-US trades,” said Sand. “So spot rates will peak in the first half of June before softening later in the month.”

Carriers are seizing the moment, announcing significant rate increases set to take effect on June 1. Many are offering premium services like “Diamond Tier” to guarantee space, betting on strong demand and shipper urgency.

“Fear and uncertainty is a powerful force in global supply chains,” Sand explained. “We are seeing this clearly as shippers fight to get their goods moving after the temporary lowering of US-China tariffs – and they are willing to pay higher rates to do so.”

The rush follows a period of depressed demand, during which carriers slashed capacity in response to 145% tariffs. While current demand has rebounded, Sand cautioned shippers to scrutinize the market dynamics at play.

“There is little doubt there is a squeeze on capacity,” he said. “But shippers should question the severity when negotiating rates. Are these rate increases being driven by a squeeze in capacity or fear in the market? Likely a combination of both.”

With rates surging and space tightening, the next few weeks will be costly for shippers. However, Sand’s outlook suggests the pressure may ease as capacity gradually returns and the initial panic subsides.