Market Pulse 2025 Week 40

Freight rates from the Far East remains under pressure with slower market activity due to the Golden Week holidays in China. Although carriers are pushing for 15 October rate hikes aimed at reversing the recent rate slump, the reinstatement of most of the regular services following the Golden Week blanked sailings provides little support for the rate push. The current high charter rates and forward fixtures stretching into next year, as well as the total absence of vessel scrapping are setting the stage for an intensification of the rate war between carriers even as the global containership fleet capacity reached a new milestone of 33m TEU for the first time.

While talks to end the 2 year war in Gaza has provided fresh hopes for an end to the Red Sea crisis, the number containerships diverted from the Suez route has remained steady at over 330 ships for 4.6m TEU currently on the Cape route.

China retaliation against USTR port fees carries little weight
Carriers are swapping ships out from the US as the USTR 301 port service fees for vessels built in China are set to take effect from 14 October. MSC, CMA CGM, ONE and Zim are amongst the carriers making last minute changes to their fleet deployments, with the vast majority of the non-Chinese operators able to avoid the USTR fees, barring a few exceptions with only 4 non-exempt ships scheduled to arrive in the US in the October window (3 operated by Zim and 1 operated by Hapag-Lloyd). The 2 Chinese carriers operating in the US, COSCO and Hede Shipping, will however be subject to the punitive fees regardless of where their ships are built with both carriers retaining most of their US fleet after 14 October.

Although China’s State Council amended its Maritime Traffic Regulations on 28 September that will allow China to impose retaliatory fees on US ships, it will have a limited impact as the US owned or operated fleet deployed in China is disproportionately smaller compared to the Chinese operators’ exposure to the US. Based on Linerlytica’s analysis, the total fees payable by Chinese operators in the US could reach $1.15Bn in the first year of implementation compared to just $180m for American operators if the same fees based on net tonnage are imposed by China.