Trade Shifts and Tariffs Distort Ex-Asia Shipping

A global shift in trade flows, triggered by a surge in tariff-driven demand on the transpacific, is putting fresh pressure on Asia–Europe container shipping markets, where carriers are already battling significant supply-demand imbalances and falling spot rates.

The redirection of cargo from China to Europe, spurred by the 90-day temporary tariff reprieve in the US, has tightened equipment availability across Asia, strained port capacity, and added to the operational headwinds faced by carriers on the Asia–Europe route.

These disruptions coincide with a faltering recovery in westbound volumes, leading to aggressive but uncertain attempts by shipping lines to raise rates.

Container shipping lines operating between Asia and Europe have announced general rate increases (GRIs) of over $3,000 per FEU from 1 June in an effort to halt the decline in spot market rates, which have fallen to roughly 40% of their January levels. Some carriers are targeting levels more than double current market averages, but the effectiveness of these hikes remains in doubt amid excess capacity and sluggish demand.

The core challenge lies in persistent overcapacity. Despite efforts to blank sailings, record levels of space are scheduled on the Asia–North Europe trade, and only limited volumes have been withdrawn. At the same time, shipments from beneficial cargo owners (BCOs) remain flat or reduced compared with last year’s already weak levels.

Meanwhile, the temporary easing of US–China tariffs has spurred a wave of front-loaded shipments to North America, overwhelming major Chinese ports and causing widespread congestion across Asia. Some of this cargo, originally bound for the US, is being rerouted to Europe, the Middle East, and South America, further tightening equipment availability and contributing to schedule disruption.

Berthing delays of up to 72 hours have been reported at Shanghai and Pusan, with Ningbo, Singapore, and Southeast Asian ports also experiencing prolonged congestion and container shortages. Yard utilisation rates in some ports are approaching 90%, with carriers such as Maersk and CMA CGM restricting equipment release to better align with available space.

In Europe, chronic congestion at Northern gateway ports continues to weigh on carrier performance. Full yards, labour disruptions, port works, and seasonal slowdowns are causing vessel delays of 2–6 days, reducing schedule reliability and limiting carriers’ flexibility to adjust capacity.

Carriers’ hopes for rate recovery now hinge on capacity tied up by congestion, a rebound in cargo demand and the ability to stabilise port operations across both ends of the trade lane. However, with additional surcharges and rate increases already announced on the transpacific for mid-June, and with Asia’s export hubs operating under extreme pressure, any spillover effects into the Asia–Europe corridor could further distort supply chains well into the summer.

Until then, the spot market remains volatile—and while shipping lines seek to raise rates, their success will depend on how quickly global trade flows normalise and whether European demand picks up enough to support higher pricing.

At PSP Worldwide Logistics, we understand the pressures facing global supply chains—and we’re here to help you navigate shifting trade flows and rate volatility with confidence.

Our strong carrier partnerships and tailored sea freight solutions ensure you stay in control, whether you’re managing time-sensitive shipments, planning ahead, or exploring alternative routings.

EMAIL our Managing Director, Colin Redman, today to find out how we can bring certainty to your ocean supply chain.