Stay ahead with the latest freight market updates, including China-Australia rate drops, US tariff impacts, port infrastructure upgrades, and global shipping route changes affecting importers and exporters.

AUSTRALIA

China-Australia Freight Rates Drop as June Demand Slumps

The China-Australia shipping lane is experiencing an unexpected downturn in freight rates, largely due to the underestimated impact of Australia’s financial year-end, which typically sees reduced spending and purchasing activity. Shipping lines had initially planned to increase rates in June, aiming for over USD 1000/TEU by July, building on momentum from other trade lanes. However, cargo volumes in early June were significantly lower than expected, leading to a stagnant market. The market usually becomes sluggish when demand does not meet the available shipping space. This surplus in space has prompted some carriers, particularly those without strong annual contracts, to aggressively cut prices. This situation contrasts sharply with other trade lanes, such as China-U.S., China-South America, China-India/Pakistan, and China-Middle East, where rates have surged. Unless shipping companies significantly reduce sailings on the China-Australia route and redeploy vessels to more lucrative lanes, a substantial rate recovery in June is unlikely.

The Sharp Rise In Transpacific Demand Can Impact Oceania

While US ports are still operating relatively smoothly in May, many importers are accelerating shipments, trying to beat possible tariff hikes –and shipping lines are ramping up services to capitalise on a 90-day tariff reprieve. This is raising concerns about looming congestion, particularly on the US West Coast. General rate increases (GRIs) are now hitting US-bound cargo, with Hapag-Lloyd announcing a USD 2,000 per container increase on shipments from the Indian Subcontinent and Middle East to North America, for instance. With tariff uncertainty looming beyond August, analysts are warning that the combination of unpredictable volume surges and limited vessel availability could lead to operational bottlenecks. For Australian importers and exporters, the knock-on effects could include tighter space availability as carriers prioritise transpacific lanes, potential container equipment shortages, and rising freight rates.

Shipping Lines Push for Port Dominance in Australia

Australia stands as one of the few major trading nations where container terminals remain independent of shipping line ownership. However, this may change with Mediterranean Shipping Company (MSC), through its terminal arm Terminal Investment Limited (TiL), leading a consortium to acquire Hutchison Ports Australia. If successful, this would mark the first instance of a foreign shipping line directly controlling an Australian container terminal. Proponents argue that such vertical integration can streamline logistics and reduce costs, but critics warn it could distort competition, reduce bargaining power for smaller shippers, and lead to industrial disruptions. The Australian Competition & Consumer Commission (ACCC) and Productivity Commission have highlighted concerns over market failures in the sector, emphasising the need for regulatory reforms to maintain fair competition and transparency.

NSW Ports Invests in Infrastructure to Boost Trade Efficiency

NSW Ports is making significant investments to enhance trade capacity and efficiency. In partnership with DP World, a $400 million project is underway to expand Port Botany’s rail terminal. This includes the addition of 600-metre rail sidings and advanced gantry cranes, aiming to double the terminal’s rail capacity to 1 million TEUs annually. NSW Ports is contributing $148 million to this initiative. Additionally, plans are in place to extend the southern quay of Brotherson Dock by 314 metres, allowing simultaneous berthing of three longer container vessels. These developments are expected to streamline operations, reduce truck congestion, and support the growing trade demands of the region.

ASIA

India Seeks Full Exemption from U.S. Tariffs in Interim Trade Deal

India is actively negotiating an interim trade agreement with the United States, aiming to secure a full exemption from the additional 26% reciprocal tariffs on Indian goods, which are currently suspended until July 9, 2025. The proposed deal also seeks to address the existing 10% baseline tariff. India is advocating for concessions in its labor-intensive sectors, such as textiles and leather, while the U.S. is requesting duty reductions on industrial and agricultural products. Both nations are working towards finalizing the agreement before the suspension period ends, with the goal of doubling bilateral trade to $500 billion by 2030.

New China-Europe Green Corridor

The Port of Ningbo-Zhoushan, the world’s largest by cargo throughput, is teaming up with European ports in Hamburg, Wilhelmshaven, and Valencia to develop green shipping corridors. A green corridor is a designated maritime route where ports, shipping lines, cargo owners, and other stakeholders work together to promote zero-emission shipping by using clean fuels, renewable energy, and smart technologies to reduce carbon footprints from start to finish. As of 2024, there are 62 such initiatives globally, marking a 40% increase from the previous year. While many are still in early stages, some are advancing with studies and plans for real implementation. The biggest challenge? Overcoming the high costs and logistics of switching to zero emission fuels, especially without strong government incentives.

India-Pakistan Tensions Remain

Tensions between India and Pakistan have once again spilled into trade, significantly disrupting cargo movements and regional supply chains. In response to the April 22 terrorist attack in Jammu & Kashmir, India has imposed a complete ban on imports from Pakistan—including goods transiting through third countries—and barred Pakistani-flagged vessels from its ports. Pakistan, in turn, has prohibited the import or transit of Indian-origin goods across all transport modes and restricted exports to India via Pakistani territory. These reciprocal restrictions are not only halting direct trade but also affecting transhipment routes and third-country logistics, causing delays, vessel re-routing, and re-stows. Pakistan trade now faces a wave of emergency surcharges from container lines, the latest being MSC’s hefty $800 per container fee for all Pakistan exports.

Cautious Optimism Around Resuming Read Sea Services

Maersk has ruled out a return to Red Sea transits this year despite an assertion from US President Donald Trump that Houthi militants in Yemen “have capitulated” and agreed to stop attacks on commercial shipping in the region. The company said it would not be responsible to return to the Red Sea and Suez Canal when there were no guarantees over the safety of crew, ships and cargo. That means Maersk vessels will continue to divert around southern Africa.

CMA CGM, however, is rerouting its India–Middle East–Mediterranean (MEDEX) service back through the Suez Canal starting next month, becoming the first major carrier to resume this shorter, traditional path amid ongoing Red Sea security concerns. This strategic shift aims to enhance efficiency and reduce transit times, signalling cautious optimism about improved conditions along the Suez route.

EUROPE

Port Congestion Spreads from Europe to the US and China

Northern European ports like Antwerp, Rotterdam, Hamburg, and Bremerhaven are experiencing significant backlogs, exacerbated by low Rhine water levels limiting barge capacity and a recent nationwide strike in Belgium. Similar congestion patterns are emerging in Shenzhen, Los Angeles, and New York, with increasing numbers of containerships awaiting berth. Analysts note that these delays are extending transit times, disrupting inventory planning, and prompting shippers to carry additional stock. Carriers are responding by rerouting vessels and introducing congestion-related surcharges. The situation is further strained by an early peak season in the transpacific eastbound trade, driven by a temporary 90-day pause in US–China tariffs, set to expire on July 9.

AMERICAS

Proposed U.S. Port Charges Could Disrupt Major Shipping Alliances

The U.S. government is planning to introduce new fees for ships calling at its ports, particularly targeting those owned or operated by Chinese companies, or vessels built in China. This move is aimed at challenging China’s strong position in the global shipping industry and encouraging more shipbuilding in the U.S. While initial proposals for steep flat fees were scaled back, the new fee structure, starting October 14, 2025, is based on ship size and will increase over the next few years.

These fees vary based on the vessel’s connection to China. Ships owned or operated by Chinese companies will face an initial fee of $50 per net ton each time they call at a U.S. port (up to five times a year per rotation/string). This rate is set to increase annually, reaching $140 per net ton by 2028. For operators using vessels built in China, regardless of their nationality, the fee starts at $18 per net ton or $120 per discharged container, whichever is higher (also capped at five times a year per vessel). These rates will also rise incrementally each year, reaching $33 per net ton or $250 per container by 2028. Additionally, foreign-built vehicle carriers will be assessed a fee of $150 per Car Equivalent Unit. Vessels under 4,000 standard container capacity are generally exempt.

The USTR regulation Section 301 is also proposing duties of up to 100% on Chinese ship-to-shore cranes, containers and other container-handling equipment. This could cause serious problems for marine terminal operators as most of this type of equipment is not available in the US and other manufactures outside China would not be able to scale up quickly enough to fill the vacuum.

Lastly, from April 2028, part of U.S. LNG exports must sail on American-built vessels—a requirement that will roll out over 22 years since U.S. shipyards currently lack the capacity. Operators who agree to buy U.S.-built ships of equal or larger size can pause their fees for up to three years, but many worry that U.S. yards simply can’t deliver quickly enough.

Why this matters: Over half of America’s general cargo and about 90% of project cargo arrives on China-built vessels. Major carriers like COSCO and OOCL—key members of the Ocean Alliance—stand to bear the highest fees, risking serious disruption or even the breakup of existing shipping alliances.

Bottom line: It is expected that the fees will encourage US importers and exporters to avoid using vessels affected by the fees, however this might not be possible due to the lack of available and suitable tonnage. In the end, shipping lines might just pass on the additional cost to the cargo owners and – ultimately – consumers and exporters. 

WORLD

Freight Market Outlook Report: Agility is the New Advantage

Geopolitical tensions and new tariffs, particularly between the US and China (along with Canada and Mexico), are forcing a rapid re-evaluation of sourcing strategies, with Southeast Asia and Mexico emerging as key alternatives, according to a recent report.

Airfreight is experiencing a dip in volumes following the suspension of China’s T86 e-commerce shipping privileges and uncertainty around further US measures, leading to carriers adjusting charters and capacity re-routing towards Mexico and Latin America. Meanwhile, ocean carriers are implementing blank sailings on East-West lanes, especially the Transpacific, to manage softening demand and prioritise profitability, potentially shifting the focus from “just-in-time” to “just-in-case” inventory management.

Adding further complexity, China’s new regulations on semiconductor tariffs based on wafer fabrication location could disrupt tech supply chains. Regionally, North America faces early peak season congestion and port shifts towards Mexico, Europe grapples with persistent port congestion and labour shortages, Southeast Asia sees steady export volumes but infrastructure bottlenecks, and Taiwan/South Korea maintain tight air and sea capacity due to strong high-tech demand.

Shippers are advised to rethink sourcing, leverage regional partnerships, and secure capacity weeks ahead to avoid surprises.