Following the May 12 rollback of US tariffs on China (from 145% to 30%), there was a short-lived spike in shipping volume from China to the US. This created a brief sense of tight capacity, leading carriers to quickly add ships and capacity to the trans-Pacific routes.

However, that surge fizzled quickly, as demand did not sustain itself. Carriers, having overestimated the rebound, now face an oversupply of capacity, especially into US West Coast ports. One dramatic anecdote: a ship en route to Europe reversed course mid-voyage to return to the Pacific route.

• Spot rate drop: North Asia → US West Coast fell by $1,100/FEU to $2,900 in just one week (June 20).
• Excess capacity: Carriers deployed extra loaders anticipating a strong rebound that didn't materialize.
• LCL shipments rising: Indicates shippers are ordering smaller quantities, signaling caution or lower demand.
  

📉 Market Takeaways

• Carriers are now caught in a bind: stay ready for peak season vs. cut capacity to stabilize rates.
• Volatility in tariffs and geopolitical signals is reshaping freight flows overnight, forcing agile but risky decisions.
• LCL growth could reflect inventory management shifts or uncertainty in future demand.

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