Transpacific freight rates recorded their largest ever one week jump as the impact of TACO (Trump Always Chickens Out) from the roll back of US tariffs has provided a windfall for the container market. The market surge has also spilled over into the charter market where vessel availability is very low and carriers are still seeking tonnage to take advantage of the large rate hikes.
The legal challenge in the US to Trump’s tariffs has added further uncertainty to the transpacific traffic volumes in the next 2 months even as capacity additions continue unabated with total weekly departures from the Far East set to increase by more than 25% in June compared to their April-May lows. Forward visibility remains very poor, with the EC freight futures market settling down after the initial exuberance following the Sino-US trade deal as European rates failed to match carriers’ elevated rate expectations. Although port congestion is starting to build up again, the current impact on the global fleet remains at 8% which is below the peak of 11% recorded earlier this year.
Johnson Leung
Where do freight rates head from here?
The transpacific freight boost lifted the SCFI composite index by 487 points on 30 May 2025, for its second largest week over week points gain on record, just short of the 505 point surge in December 2023 that was driven by the onset of the Red Sea crisis. The SCFI is expected to continue to rise this week as the full impact of the 1 June rate hikes take effect, but there remains little clarity on where the market heads from here as new capacity injections to the US starts to dampen the rate momentum, while uncertainty remains over the sustainability of the volume surge after the 90 day tariff truce ends.
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