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Introduction:
Recently, the Trans-Pacific shipping market has presented a scene of intense activity yet significant challenges, driven by factors like surging demand and adjustments in tariff policies. Major shipping lines have been very active, launching new routes consecutively. Freight rate volatility has captured industry attention, while risks of US port congestion and adjustments in shipbuilding strategies have also become focal points.
The Gemini cooperation between Maersk and Hapag-Lloyd has reached a new peak with the launch of the new TP9/WC6 route. Centered around the loop Xiamen - Busan - Long Beach - Xiamen, it establishes a "dual-speed channel" with 18 days (China to US West Coast) and 14 days (South Korea to US West Coast).
The first vessel, the "Rona Maersk" (4600 TEU), departed from Xiamen on June 24. Its slot allocation strategy highlights a focus on the East China manufacturing cluster – Xiamen as the first port covers export demand for high-end products like electronics and machinery, while the inclusion of Busan strengthens Northeast Asian supply chain integration capabilities.
Notably, Hapag-Lloyd simultaneously deployed the 4250 TEU vessel "Synergys Keelung" for its maiden voyage from Xiamen on July 1. This dual-ship operation model increases service frequency to weekly, directly countering potential schedule disruptions caused by US West Coast port congestion.
The reopening of China United Lines' (CULines) TP1 route is a landmark industry event. This Shekou - Ningbo - Qingdao - Long Beach - Shekou loop (38-day cycle) not only represents a "course correction" after its withdrawal in 2023 but also signals confidence in long-term China-US trade.
The deployment of 5-6 vessels ranging from 2400-2800 TEU precisely matches the demand of small and medium-sized shippers for "small and beautiful" capacity, particularly suitable for traditional export categories like home appliances and textiles. The first vessel, "CUL Manila," departed from Shekou on June 7 and arrived in Long Beach on June 29, compressing transit time by 2-3 days compared to similar previous routes, demonstrating a deep commitment to sourcing in South China.
With expectations of US West Coast rates soaring to $6,000 / 40ft and US East Coast reaching $7,000 / 40ft, such lucrative prospects are driving shipping companies into a "capacity arms race." Between weeks 16-20 alone, the number of vessels waiting at Shenzhen surged from 17 to 31, while waiting ships at Los Angeles / Long Beach doubled from 17 to 42. Declining vessel turnaround rates directly widen the effective capacity gap, creating a cycle of "rising demand - opening new routes - port congestion - further rate hikes."
The 90-day tariff suspension acted like a catalyst. The Shanghai Containerized Freight Index (SCFI) reacted first: US West Coast rates rose 6% to $3,275 / 40ft, and US East Coast rates increased 5% to $4,284.
According to maritime consultancy Drewry, freight rates from Shanghai to New York surged 19%, or $704 per 40-foot container to $4,350. Rates from Shanghai to Los Angeles jumped 16%, or $423 per 40-foot container to $3,136.
This stems from a classic "pre-emptive logic" – shippers, aiming to avoid future tariff risks, concentrated shipments 3-4 weeks early. This led to extreme space shortages from late May to mid-June, with some sailings experiencing a "no space available" situation.
Carriers collectively announced General Rate Increases (GRIs) effective June 1st, aiming to push total US East Coast rates to $7,000 / 40ft. This is both a response to rising costs (bunkers, labor, vessel chartering) and a "price test" for long-term contract customers.
However, the spot market showed divergence: The World Container Index (WCI) for Shanghai - Los Angeles rose only 2% to $3,197, and Shanghai - New York increased 4% to $4,257 – gains significantly lower than GRI expectations, reflecting shipper resistance to "inflated quotes." Xeneta data shows the 75th percentile market rate (upper-mid range) reached $3,200 for US West Coast and $4,250 for US East Coast, cross-validating with SCFI and revealing a cautious upward trend in actual transaction ranges.
Asia-Europe routes show "stability": Shanghai - Rotterdam maintained $2,030, Shanghai - Genoa rose slightly by 4% to $2,841, presenting a stark contrast to the Trans-Pacific boom.
This divergence stems from supply-demand structure differences – sluggish European economic recovery dampens demand, while the Trans-Pacific benefits from the US inventory restocking cycle and Chinese supply chain resilience, acting as the global shipping "engine."
US West Coast ports are experiencing a "double squeeze": On one hand, new routes concentrate calls at Long Beach and Los Angeles, pushing berth utilization beyond 95%. On the other, rail transfer efficiency has dropped 12% due to stalled union negotiations, extending container dwell times from 4.2 days last year to 5.8 days. More critically, the upcoming July 4th holiday could trigger a new round of operational delays, creating a vicious cycle of "ships waiting for berths - containers waiting for trains - cargo waiting for delivery."
The US "flag discrimination policy" is reshaping the shipbuilding market: Ocean Network Express (ONE) abandoned Chinese shipyards, turning to South Korea's Hyundai Heavy Industries to order 16,000 TEU LNG-powered vessels. It accepted an 11% price premium to avoid the $120/container port fee for "Chinese-built ships" (scheduled to rise to $250/container by 2028).
Conversely, COSCO Shipping Group continues to charter 8,300 TEU/11,400 TEU vessels built in Shanghai from Seaspan, highlighting state-owned enterprises' "resilience to policy risks." This divergence could lead to Korean shipbuilders capturing the high-end market, while Chinese yards shift towards domestic trade or third-country orders, potentially restructuring the global shipbuilding capacity landscape.
As the peak of front-loaded cargo passes, booking data after June 15 will reveal the resilience of true demand. If US West Coast rates fall below $3,000, it could trigger carriers to implement "blank sailings" to protect rates.
The progress of negotiations between the International Longshore and Warehouse Union (ILWU) and employers will directly determine whether ports can smoothly handle the new route capacity during the July-August peak season.
If ONE's order for 12 ships with Hyundai materializes, it could trigger a collective "Koreanization" move within the Japanese shipping alliance (ONE, MOL, K Line), intensifying Northeast Asian shipbuilding competition.
In this shipping cycle filled with variables, the Trans-Pacific route is not only the "barometer" of global trade but also the "touchstone" of supply chain wisdom. When rates return to rationality and congestion gradually eases, what remains will be a redefined concept of the "resilient supply chain."
Amid the current unpredictable shipping landscape, Shengshi Group is committed to being your solid backbone, standing shoulder-to-shoulder with you.
Shengshi Group Global Logistics – Specializing in US final clearance & transshipment, Amazon FBA logistics, and one-stop third-party warehousing services. Headquartered in Los Angeles. As a US-based customs broker, we possess over 50 years of clearance experience and our own in-house Green Card holder Chinese clearance team. We have the latest news, firsthand information to help you avoid pitfalls and achieve comprehensive cross-border e-commerce business development.
In this challenging tariff environment, choosing us means choosing professionalism, efficiency, and peace of mind. Shengshi Group will go all out, using our professional capabilities to safeguard your cargo, supporting your steady progress in the complex and ever-changing international trade market. Let's overcome difficulties together and open up a broader business horizon!
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