US Logistics Update [Jun 7, 2025]-English

• President Trump and Chinese President Xi Jinping agreed to resume trade talks over the phone, and President Trump announced on June 6 that Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and U.S. Trade Representative (USTR) Jamieson Greer will meet with Chinese delegates in London on June 9 to resume bilateral trade negotiations, significantly raising expectations of a deal. However, the Chinese side has suggested that the communications and meetings are reluctantly being conducted at the request of the U.S., framing the situation as a matter of national pride. Even the relatively less complex U.S.-Japan trade negotiations have failed to reach an agreement after five rounds of talks. Considering factors such as the perception that the U.S. may be less resilient than China in enduring the negative effects of the tariff war, a resolution to the U.S.-China negotiations is expected to take considerable time. Meanwhile, the U.S. trade deficit (goods and services) in April narrowed to $61.6 billion, down $75.7 billion (-55.5%) from the previous month. The U.S. trade deficit with China, which drew particular attention, declined to $19.7 billion in April from $24.2 billion in March, though the change is not substantial. Similarly, imports from China stood at $25.4 billion in April, showing little difference compared to $29.4 billion in March, despite the ongoing tariff hikes. 

• Tariffs on foreign steel and aluminum products imported into the U.S. are set to increase to 50% from 25% on June 4, with most economists fearing a price tsunami effect that will raise the cost of nearly everything as steel and aluminum are used in virtually every sector. Meanwhile, the personal consumption expenditures (PCE) price index, a measure of prices paid by U.S. residents for goods and services, continued to slow in April, rising 2.1% year-over-year (up 0.1% month-over-month). Excluding energy and food, the underlying PCE price index rose 2.5% year-over-year and 0.1% month-over-month, the lowest rate in four years since March 2021 (2.2%). It will be interesting to see how the Fed, concerned about rising inflation due to tariffs, will balance the lagging economic data with President Trump's pressure to cut interest rates.

•    Trans Pacific East Bound (TPEB) trends

  • Demand: Demand continues to be strong. In addition, demand is likely to surge from China and other Asian countries looking to move cargo before July 9, when the 90-day tariff moratorium ends. Booking at least one month in advance required

  • Vessel supply: 85% of normal levels. 7 out of 10 services suspended due to tariffs have been or will be restored.     

  • Equipment : No major issues with container availability. Chassis supply is also not an issue.

  • Rates : Rates spiked due to surging demand and tight vessel supply (see graph below) 

Meanwhile, Peter Sand, principal analyst at Xeneta, notes that the recent 88% increase in ocean freight spot rates on the China to US trade lane shows demand from some shippers who are willing to pay to move their cargoes forward during the 90-day tariff moratorium, but “this won't last long,” noting that “vessel supply is returning to the Pacific, and once cargoes are out at sea and inventory starts to build up, the desperation of shippers to get their supply chains back up and running will ease.” “Spot freight rates are expected to return to downward pressure after peaking in June,” he added (see China to US Ocean Bookings Index below).                         

• U.S. port conditions remain favorable(see North America Vessel Dwell Time below)

• Carriers Announce Trans Pacific West Bound (TPWB) Fuel Surcharges Increase (Effective 7/1)

  Most carriers operating Pacific routes have announced fuel surcharge increases from the US to Asia, effective July 1. The increase varies by carrier and ranges from $36 (CMA CGM) to $387 (HMM) per dry cargo. The official rationale is to adjust the BAF, but in reality, the market is watching with suspicion whether it is a prelude to raising freight rates such as GRI in view of the occurrence of port congestion and bottlenecks from July.

• China to US volumes recovered strongly

  According to WorldACD Market Data's analysis, global air cargo tonnage grew +4% year-on-year in May, showing a remarkable resilience in the air cargo market. While May was expected to be a slow month for the market due to the end of the 'de minimis' waiver on May 2, coupled with holidays in several countries, the tentative agreement between the US and China on May 12 (which included a full cancellation of some tariffs, a 90-day moratorium on tariffs, and some relaxation of de minimis tariff changes) spurred a strong rebound in volumes from China and Hong Kong to the US in the second half of the month, with volumes increasing significantly (see table below)