Trade tensions escalated over the past month, with the U.S. announcing a 25% tariff on imports from Canada and Mexico (implementation delayed by 30 days), reinstating a 25% tariff on steel, increasing aluminum tariffs from 10% to 25%, and imposing an additional 10% tariff on all Chinese imports. In retaliation, China levied a 15% tariff on U.S. LNG and introduced a 10% tariff on crude oil, agricultural machinery, and other key sectors.
Amid these developments, global freight markets softened. Ocean freight rates declined across major trade lanes following the Lunar New Year, while air cargo rates saw a month-over-month decline, marking the end of an extended growth cycle. Domestically, the U.S. freight market exhibited continued weakness, with dry van spot rates and rejection rates dropping significantly, signaling subdued demand and excess capacity.
Click here to access this month's full update.
Highlights from this month's update:
- Escalation of U.S. tariffs on key industries (automotive, electronics, clean energy) is driving global supply chain reconfiguration, with shifts toward Vietnam, Mexico, and other regions
- Ocean rates trended downward post Lunar New Year
- Air rates dropped month-over-month though demand remained elevated
- Domestic trucking saw its surge in demand quickly dissipated, with spot rates quickly dropping at the end of January. Inventories are high and were likely built up in preparation for potential tariffs
- Parcel carriers are consolidating shipping options and improving efficiency, illustrating a stronger focus on profitability
- Warehousing rates saw a small raise while vacancy rates dropped slightly
Further reading:
Read more from Marc Iampieri, Brian Nemeth , Erik Mattson , and James Roe : What importers and exporters should be aware of as they negotiate their 2025-2026 ocean contracts
Originally published on Linkedin, 25 February 2025
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