Why Are Global Shipping Rates Plunging? SCFI Falls for 7th Week Amid Tariff Uncertainty

Key Market Trends

1. SCFI’s 7-Week Slide

• US West Coast: $2,067/FEU (-3.5%)

• US East Coast: $3,378/FEU (-6.5%)

• Europe: $2,090/TEU (+0.5%) [only gainer]

• Mediterranean: $2,418/TEU (-4.4%) .

• Overall Index: Down 54.31 points (3.3%) to 1592.59.

• Major Routes:

2. Carriers Scramble to Cut Capacity

• 175,000 TEU withdrawn from Trans-Pacific routes (11% of US West Coast capacity) .

• MSC & Maersk cancel August rate hikes amid weak demand.

3. Tariff "Calm Before the Storm"

• US importers frontloaded shipments before potential 15% tariff hike, causing post-rush slump.

• Xeneta warns China-US West Coast rates down 59% since June ($2,268/FEU) .

Why This Matters

• Cost Pressure: US West Coast rates near carrier break-even ($1,700–$1,900/FEU) .

• OEM Risks: Unregistered OEM goods face 100% seizure in Mexico—900+ China-linked containers abandoned [previously reported].

• Peak Season Doubts: Drewry predicts prolonged rate drops unless tariffs ease.

Quote:
"This isn’t a normal slowdown—it’s a tariff-induced hangover." — Logistics analyst.

What’s Next?

• August 1 Tariff Deadline: Trump’s 15% EU deal may set precedent for China talks.

• Q4 Forecast: Rates may dip further unless Golden Week (Oct) sparks demand.