US-China trade truce not to revive container shipping market: Xeneta

Average spot rates from China to US West Coast on October 31 were down by 59 per cent year on year (YoY) at $2,147 per 40-ft container unit (FEU). Spot rates into the US East Coast were down by 48 per cent YoY at $3,044 per FEU.

Declining spot rates coincide with falling volumes on Trans-Pacific trades, with latest figures showing container shipping demand from China to the United States down by 13 per cent YoY in August.

“The US-China truce is a positive development, but it will not suddenly breathe life into weakening ocean container shipping demand on Trans-Pacific trades,” Emily Stausboll, senior shipping analyst at the Norway-based ocean and air freight rate benchmarking and market analytics platform, said in a company release.

“Tariffs are still high despite the truce and US shippers will use the first half of 2026 to draw down inventories built up through frontloading imports earlier in the year to protect supply chains in the wake of the escalating trade war,” she noted.

“Xeneta expects global average spot rates to fall up to 25 per cent for the full year 2026 and long-term rates to drop up to 10 per cent against this backdrop of subdued demand between the world’s two most powerful trading nations,” she said.

The Xeneta forecast for 2026 puts global average long-term rates 20 per cent below levels in December 2023, prior to escalation of conflict in the Red Sea.

“The US-China truce sees the removal of port fees for ships calling at both sides of the Pacific. This is welcome news for carriers, with some being hit with multi-million-dollar port fees, but they are still heading towards potentially loss-making territory if long term contract rates drop significantly below pre-Red Sea Crisis levels at the end of 2023,” Stausboll said.

“Carriers have already repositioned vessels across global shipping services to deal with the threat of the port fees and this disruption is now seemingly all for nothing,” she added.

ALCHEMPro News Desk (DS)