US Logistics Update [May 31, 2025]-English
- chullee2
- Jun 1
- 3 min read
Despite the U.S. economy showing signs of near-full employment with a low inflation rate in the 2% range and an unemployment rate around 4%, it has been confirmed that members of the Federal Reserve expressed concerns during the FOMC (Federal Open Market Committee) meeting held on May 6–7. Specifically, they are worried that the Trump administration’s tariff policies could simultaneously increase the risks of both inflation and unemployment. This has significantly lowered the likelihood of the Federal Reserve cutting interest rates before September, and Wall Street now expects with near certainty that the Fed will hold rates steady at the upcoming FOMC meeting on June 18. The graph below illustrates the trend of the federal funds rate, with the shaded areas indicating periods of economic recession.
The fate of the Trump administration's tariff policy is taking a turn for the worse as a federal appeals court ordered a ‘pause until next month's 9th,’ in response to a federal Court of International Trade (CIT) panel's decision on the 28th to stop President Trump's reciprocal tariffs from taking effect, saying they are invalid. As a result, many experts predicted that U.S. trading partners would be less willing to negotiate with the U.S. in the future due to the uncertainty of tariff policy. However, the White House was quick to emphasize that even if the court's ruling is upheld, it will not affect ongoing tariff negotiations with other countries, as there are various legal avenues to impose tariffs. Meanwhile, President Trump announced on May 25 that he would postpone the imposition of 50% tariffs on the EU until July 9, two days after suggesting that it would take effect on June 1.
Trans Pacific East Bound (TPEB) trends
Demand: Bookings surged due to pent-up demand following the tentative agreement on US-China tariff negotiations and peak seasonal demand such as back-to-school. The surge in demand is expected to continue until at least the second quarter. Booking at least one month in advance is required.
Vessel supply: Additional vessels are being deployed in response to the surge in demand from China, but due to the lead time required for route adjustments, full supply recovery is expected by the end of June. Currently at 80-85% of normal. (See TPEB route supply table below)
Equipment : No major issues with securing Containers. Chassis supply is also not an issue.
Rates : GRI ($3,000 per container increase) and Peak Season Surcharge (PSS) in full effect from 6/1 due to surging demand and tight vessel supply.
However, no impact on US West Coast ports yet (see North America Vessel Dwell Time below)
Congestion Spreads from Shanghai to Singapore Port as Cargo from China Surges
While the Port of Shanghai is experiencing severe congestion as cargo from the United States' 90-day tariff moratorium on China pours in, the Port of Singapore, the world's largest transshipment port, is experiencing major congestion as carriers reconfigure their networks to accommodate a surge in container ship arrivals, industry sources said. Meanwhile, port congestion is expected to spread to U.S. West Coast ports in June as ships carrying China-bound volumes that surged during the tariff moratorium begin arriving at Western ports. However, Gene Seroka, president of the Port of Los Angeles, said he is prepared for a demand surge that is weaker than the pandemic, but is concerned about bottlenecks outside the port. In particular, he warns that shortages of rail capacity, warehouse space, and chassis, which are essential for container transportation, could be much more severe. There is growing concern that these bottlenecks could eventually spread beyond the port and into logistics as a whole.
China to U.S. volumes recover significantly
Demand from China (including Hong Kong), which was down nearly 30% year-on-year prior to the US-China tariff moratorium, rebounded strongly in week 21 to show a 14% year-on-year decline. WorldACD's comparison of the last six weeks of data shows that airfreight exports from China to the U.S. are down -14% compared to the same period in 2024, with significant declines in Weeks 18 and 19, followed by a near recovery to 2024 levels in Week 21 with a -5% difference, raising market expectations. (See Graph below)
