After having previously reduced their capacity on the Transpacific route through cancellations of itineraries (blank sailings) and even suspensions of entire services, shipping lines, following the 90-day tariff truce between the US and China, are facing a sudden need to increase their deployment of container ships. According to Drewry estimates, blank sailings from Asia to the US West Coast will decrease from 33 in May to 24 in June (-28% month-on-month). Meanwhile, blank sailings from Asia to the US East Coast will decrease from 23 in May to 17 on June 9 (-23%).

But the agreement temporarily reducing the US tariff on Chinese imports from 145% to 30% not only had repercussions on shipping lines' blank sailing programs, but also had immediate repercussions in the market, boosting the value of spot rates. As of May 15, Drewry's World Container Index (WCI) rose 8% week-on-week to US$2.233/FEU, driven by reduced capacity and importers rushing to anticipate possible changes in Trump's trade policies, not without justification.

Of course, the impact of the truce had a broader impact on transpacific trades, with the Shanghai-Los Angeles WCI up 16% week-over-week to $3.13/FEU, while the Shanghai-New York WCI rose 19% to $4.350/FEU.

Drewry analyst Philips Damas highlights that the "cancellation of cancellations" reflects the unstable macro environment facing shipping lines. "We observe that the container shipping market is reacting to trade policy announcements with fluctuations in trade volumes, capacity volumes, and spot rates, similar to the stock market."

The importers' race against time

While shipping lines are rushing to replace canceled capacity on the Transpacific route, importers are experiencing their own rally to import as many goods as possible from Asian countries other than China before July 9, when the 90-day pause on reciprocal tariffs expires. This new announcement seems to imply that after this deadline, tariffs could rise again to an unknown and, of course, feared level.

In the case of China, maritime industry analyst Lars Jensen explains, the 90-day tariff deferral apparently applies to the date the cargo clears U.S. customs, not the date it is shipped. This would imply that shipments must be made well before August 14, the date the tariff truce between the two economic powers expires.

Shipping lines such as Hapag-Lloyd have already acknowledged the substantial increase in volumes from China, to the point of stating that they can currently only serve customers with long-term contracts. Meanwhile, Premiere Alliance, comprised of ONE, HMM, and Yang Ming, announced the launch of its new "PS5" service from China to the USWC starting June 5, reflecting the need for increased capacity on the route.

Shock would not have a widespread effect

At the logistical level, the recovery of international trade is expected, with increased cargo volumes destined for the US from China and the reopening of services between the two countries, could, however—according to Alphaliner—generate bottlenecks and inefficiencies, which, in turn, would benefit the chartering market through demand for additional capacity.

How long will this frenzy last? Not long. That's at least according to Xeneta's chief analyst, Peter Sand, who argues that while importers have no time to waste, and the avalanche of cargo will put upward pressure on spot rates on the Transpacific trades, a deeper analysis indicates that these will peak and then stabilize as shipping lines reallocate their capacity to meet demand; after that, rates will begin to decline again, as observed in the first quarter. "This is expected to happen in the next two to four weeks," the analyst predicts.

Regarding long-term contracts, the report indicates that the data "shows that importers are paying rates close to the upper market average for contracts signed after the U.S.-China agreement, while contracts signed before May 12 will continue to hold back buoyant market averages for a short period."