Posted on: August 19, 2025 / Last updated: August 19, 2025
North America-bound Container Freight Rates Hit 2025 Low: Oversupply and Tariff Uncertainty
CONTENTS
SCFI Shows 5 Weeks of Continuous Decline
According to the Shanghai Containerized Freight Index (SCFI) as of May 15, 2025, spot container rates to North America continued to fall for the fifth straight week, hitting a new low for the year.
- West Coast: USD 1,759
- East Coast: USD 2,719
This marks the lowest level since December 2023, and about 70% lower than the same period last year.
Shippers and forwarders are stunned by the unexpected sharp decline.
Three Major Reasons Behind the Drop
1. Oversupply: The wave of newly built vessels has flooded the market with excess space. Despite blank sailings, structural overcapacity remains unresolved.
2. End of Peak Season: The usual demand up to September was front-loaded due to fears of Trump’s tariff reinstatement, causing demand to peak earlier than usual.
3. Tariff Uncertainty: The unclear direction of tariff policy ahead of the U.S. election prompted early shipments. This caused a temporary spike in demand followed by a steep drop.
Global Downtrend in Freight Rates
Not only North America, but SCFI’s overall index has fallen for 10 consecutive weeks, indicating a global imbalance in demand and supply.
- North Europe: USD 1,820
- East Coast South America: USD 3,340
- Middle East: USD 1,381 (slight increase)
Most trade lanes are down, except a few. Geopolitical easing and customs normalization may have softened demand worldwide.
Outlook for the Second Half of 2025
While some analysts believe rates are near the bottom, a clear demand recovery is essential for a rebound.
U.S. consumer trends, major retailers’ orders, and the final tariff policy will be key drivers.
Carriers are adjusting with blank sailings and port omissions, and route consolidation or service restructuring is likely in the coming months.
Strategic Considerations for Shippers
For shippers and forwarders, freight rates are a crucial cost factor.
Securing space while keeping costs low will be a challenge.
Flexible strategies such as multi-route use and long-term contract revisions are vital.
