Container Shipping Rates Plunge as U.S. Demand Fades
Container shipping rates on the Shanghai–U.S. West Coast route have collapsed by more than half since early June, falling from approximately $6,000 to near $2,500 per 40-foot container. The decline reflects a weak rebound in U.S. imports following significant tariff fluctuations and escalating economic uncertainty.
The volatility was triggered by a dramatic shift in tariff policy. In early April, U.S. tariffs on Chinese products soared to 145%, prompting a sharp slowdown in shipping as importers halted orders. When those tariffs were partially rolled back to 30%, many rushed to resupply. But the initial surge was short-lived, and carriers have since returned idle vessels to Asia–U.S. lanes, driving spot rates sharply lower.
Industry data underscores this reversal. Drewry’s World Container Index dropped by 9% for two consecutive weeks, falling to $2,983 per 40-foot container as of June 26. This follows a five-week rally that had lifted levels toward the $6,000 mark. Transport rates to Los Angeles fell nearly 20%, while those to New York declined by approximately 13% to around $5,700.
Analysts note that this dramatic oscillation is a clear sign of unstable import demand. Drewry commented that the recent uptick in shipments after the temporary tariff easing “will fail to have the lasting impact we had initially expected.”. Meanwhile, maritime consultancy forecasts predict further weakening of supply-demand balances in the second half of the year, contingent upon ongoing legal actions regarding tariffs and changes in shipping capacity.
The impact of tariffs on global shipping extends beyond rates. Major U.S. ports on the West Coast saw a 25–40% drop in inbound container traffic in recent months, straining logistics operations and affecting longshore workers, truckers and retailers. Across the wider industry, Drewry forecasts a 1% drop in global container volumes in 2025 as U.S. trade policies continue to distort global shipping patterns.
Looking ahead, market participants face uncertainty from upcoming policy deadlines. A July 9 tariff deadline looms for broad tariff measures, while discussions continue over how to balance demand, capacity, and regulatory obligations. The pattern of abrupt spikes and dives in freight costs may persist unless sustained demand returns or policy volatility eases.
In summary, the dramatic plunge in shipping rates reveals the fraught dynamics of global trade: tariff shocks lead to sharp import surges followed by rapid cooldowns. The current slump underscores both policy risk and fragile U.S. consumer demand. For logistics professionals, retailers, and investors, tracking freight indices like Drewry’s and monitoring tariff deadlines will be essential to managing cost exposure and anticipating supply chain disruptions.
