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Tariff Pause Triggers Early Transpacific Peak Season

May 22, 2025 | , , , , , , , , , , ,

The 90-day suspension of US-China tariffs has delivered a sharp jolt to transpacific ocean freight, triggering an unseasonal spike in demand and pushing spot rates up significantly.

This unexpected policy reprieve has not only created a narrow window of predictability for US importers, but also accelerated peak season behaviours months ahead of the traditional schedule.

With booking volumes surging and available capacity still constrained, shippers are entering a period of extreme competition for space and elevated freight costs, especially on Asia–US West Coast lanes.

Since the announcement of the tariff pause, transpacific spot rates have climbed steeply. The Shanghai Containerised Freight Index (SCFI) rose by 14% last week, with further gains expected. This marks the largest weekly increase of 2025 so far and reflects mounting pressure on space and capacity across eastbound transpacific routes.

  • Shanghai–Los Angeles FEU rates have climbed 16% in just one week.
  • Shanghai–New York DEU rates jumped 19%.

While these levels remain well below pandemic highs, they are trending upward quickly, particularly as US importers race to bring in goods during the tariff pause window, which expires on 14 August.

Sudden and Significant Capacity Crunch
The spike in demand has exposed a capacity shortfall that many believed had stabilised. Carriers had withdrawn substantial tonnage from Far East–US West Coast services in April and May, anticipating a slower season. Now, those services are being rapidly reinstated in full as bookings rebound sharply.

Carriers have responded with unusual speed, with suspended loops returning across multiple alliances, vessels are being upsized to handle growing volumes, additional services are being announced and blanked sailings reversed.

Despite these adjustments, near-term capacity remains tight, especially due to ongoing vessel redeployments, congestion at Chinese ports, and bottlenecks at container freight stations (CFS) in China.

Adding to the live bookings, is a wave of previously manufactured cargo stored in bonded warehouses, which is expected to enter the market imminently.

If this stored cargo flows into the system during the remainder of May, demand could spike by 16% to 48% on top of normal levels. If shipments are delayed until June, the increase would ease to a more manageable 5% to 16%, but that assumes no further acceleration from early peak season orders.

Importantly, this analysis does not yet account for traditional peak season volumes, which are expected to surge in the coming weeks as US importers seek to front-load shipments ahead of the 14 August tariff deadline.

Challenges and Considerations
The rapid resurgence in volumes is pushing logistics networks to their limits. Shippers can expect tight space availability, higher rates, with ongoing volatility through June and July, possible rollovers, even on confirmed bookings, and longer dwell times, with delays at origin due to congestion

While carriers are acting quickly to rebalance networks, the sheer speed and scale of the demand rebound mean constraints are likely to persist through Q3.

As always, Metro is working closely with clients to minimise disruption and capitalise on available capacity. With robust freight forwarding capabilities, deep ocean carrier relationships, and on-the-ground presence in the United States, we’re helping customers:

  • Secure space and locked-in rates on core transpacific lanes
  • Prioritise high-value or time-sensitive cargo
  • Adjust routing strategies to reduce risk and maintain delivery schedules

With early peak season now well under way, proactive planning is essential. Space is already tightening, and costs will likely continue to climb in the lead-up to August.

If your business relies on Asia–US trade flows, EMAIL Andrew Smith today and learn how we will keep your supply chain running smoothly, despite the disruption.

COSCO appoint Metro partner

US Port Fees on Chinese-Built Vessels

May 20, 2025 | , , , , , , , , , , , , , ,

The United States Trade Representative (USTR) has finalised a revised plan to impose port fees on Chinese-built containerships calling at US ports.

This follows the reintroduction of the SHIPS for America Act, part of President Donald Trump’s broader push to revive the US shipbuilding industry and reduce reliance on Chinese maritime infrastructure.

While significantly less disruptive than the original February proposal, which threatened to add up to $1.5 million per port call and cost the industry $24 billion, the revised version will still increase shipping costs by approximately $1 million per voyage. These added costs may have ripple effects across global supply chains.

What’s Changing – and When?

USTR Port Fee

  • Start Date: Mid-October 2025
  • Escalation: Costs will increase every 180 days over a three-year period
  • Estimated Additional Costs:
    • Chinese operators (e.g. COSCO/OOCL): USD $250–$1,600 per TEU
    • Non-Chinese operators using China-built vessels: USD $100–$400 per TEU

Crucially, carriers will only be charged once per US rotation, not at every port call. Exemptions apply for:

  • Vessels under 4,000 TEUs
  • Voyages under 2,000 nautical miles
  • China-built vessels owned by US-based carriers

Carrier Reactions and Supply Chain Impacts
Most non-Chinese carriers are expected to redeploy tonnage to avoid the fees, shifting Chinese-built vessels away from US trades in favour of non-Chinese built ships. Some may elect to use transhipment hubs in the Caribbean to bypass direct calls to US ports.

Chinese carriers like COSCO and OOCL will be hardest hit. With limited ability to avoid the charges, these carriers may lean more heavily on alliance partners like CMA CGM or Evergreen, potentially distorting market dynamics and reducing competition on some transpacific routes.

Despite initial fears, widespread surcharges are currently seen as unlikely. Market competition and alternative capacity could prevent many carriers from passing costs directly onto shippers, tthough selective route-specific or carrier-specific fees may still emerge.

SHIPS for America Act
This proposed legislation, while not yet passed, aims to further penalise Chinese-built, -owned or -registered vessels. It also opens the door for other “countries of concern” to be added in future. No cost estimates have been released, but shippers should remain alert to potential follow-on impacts.

The evolving policy landscape introduces fresh uncertainty for importers and exporters, especially those with supply chains linked to Asia–US routes.

Metro is actively monitoring developments and engaging with carriers and industry bodies to stay ahead of the real-time implications. Our goal is to help customers navigate any changes smoothly and make informed decisions.

If your business could be affected by these measures, or you simply want to future-proof your supply chain with revised routing strategies and updated landed cost assessments, please EMAIL our Managing Director, Andrew Smith.

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US and India Trade Deals Open Doors for UK Traders

May 13, 2025 | , , , , , , , , ,

Two landmark trade agreements with the US and India promise to reshape supply chain opportunities for UK importers and exporters. Both deals offer a mix of immediate tariff relief and long-term potential to diversify sourcing and boost exports.

The newly signed UK-US agreement has reduced US tariffs on British automotive exports from over 25% to 10%, with an annual cap of 100,000 vehicles. While this cap closely matches current UK export levels, the reduced tariff eases pressure on British vehicle manufacturers, particularly those which had previously paused US shipments amid cost uncertainty. The agreement also removes the 25% tariff on UK steel and aluminium, helping lower input costs for UK manufacturers supplying US markets. However, US tariffs remain high for certain automotive parts and some categories of goods.

The agreement marks the first major trade pact since the imposition of US “Liberation Day” tariffs. While the deal falls short of a comprehensive free trade agreement, it provides immediate relief for supply chains and signals a willingness to continue negotiations on broader market access. The US has also committed to fast-tracking UK goods through customs, helping to ease some of the red tape associated with transatlantic trade.

In parallel, the long-awaited UK-India free trade agreement opens up new avenues for fashion and footwear supply chains. Tariffs on over 90% of UK exports to India, including clothing and footwear, will be phased out over a 10-year period. For Indian goods entering the UK, the deal eliminates nearly all levies, offering UK retailers access to competitive manufacturing without compromising quality.

The deal is particularly attractive for UK footwear brands and fashion houses already sourcing from India’s strong leather and non-leather production base. The expected reduction of tariffs and customs barriers is likely to enhance cost competitiveness and shorten lead times. With India’s middle class growing steadily—accounting for nearly a third of its population—the market also presents growing demand for high-quality, internationally recognised UK brands.

At the same time, the agreement offers UK fashion retailers a timely opportunity to diversify sourcing strategies away from markets where rising costs and geopolitical instability have made supply chains increasingly fragile. Industry experts believe some fashion retailers could improve margins by double digits once they fully leverage the benefits of the India deal.

For UK automotive exporters, the India pact includes a commitment to reduce tariffs on UK car exports from well over 100% to 10%. Although the final details of quotas and implementation remain under discussion, it represents the first step towards opening India’s protected automotive market to British manufacturers.

Both trade agreements offer UK businesses critical alternatives at a time of global uncertainty. They present clear potential for easing supply chain costs and improving market access for two key industries that underpin UK manufacturing and retail exports. However, much will depend on the full legal texts and how effectively the provisions are implemented in practice.

The new US and India trade agreements offer real and immediate opportunities. Whether you are looking to streamline transatlantic automotive exports, expand your retail footprint, or diversify fashion and footwear sourcing, Metro can help you unlock the full benefits of these landmark deals.

With decades of experience supporting UK importers and exporters, our expert team understands how to navigate new trade frameworks and optimise supply chain performance. We can help you fine-tune logistics, reduce costs and simplify customs compliance, to take advantage of the new tariff reductions and market access opportunities now on offer.

EMAIL Andy Smith, Managing Director, to find out how we can help you capitalise on these positive changes and build a resilient, agile supply chain ready for growth.

China exports

US-China Tariff Pause Offers Fashion Breathing Space

May 13, 2025 | , , , , , , , , ,

Fashion brands and retailers around the world have welcomed a temporary easing of tensions between the US and China, but remain wary of the wider uncertainty still gripping global supply chains.

A 90-day agreement announced on Monday May 12 will, from May 14, reduce US tariffs on Chinese goods from 145% to 30%, and cut Chinese tariffs on US goods from 125% to 10%. While the move has offered immediate relief, industry bodies warn it does little to address the long-term challenges facing the fashion sector.

The announcement sparked a wave of activity as brands reinstated production orders they had previously paused. The high tariff levels had forced many companies to cancel orders, divert production to Vietnam, Cambodia, and Sri Lanka, or slow shipments into the US and Europe. The easing of duties now gives brands the opportunity to fulfil autumn and holiday orders with a degree of cost certainty, albeit only for a limited window.

Trade associations remain cautious. The Footwear Distributors and Retailers of America called the agreement “a step in the right direction” but emphasised that even the reduced 30% tariff remains a significant burden. The fashion industry, with its typically thin margins, has found it difficult to absorb such additional costs. Retailers and importers warn that prices will inevitably be passed onto consumers, fuelling inflationary pressures across apparel and footwear categories.

The American Apparel & Footwear Association (AAFA) noted that this tariff rate applies in addition to any existing duties and customs fees, potentially pushing total charges on certain items to around 50%. Smaller brands, in particular, lack the scale to mitigate these costs and are likely to face greater challenges.

The agreement doesn’t not reverse the abrupt end of the de minimis exemption, which previously allowed shipments valued at <$800 to enter the US duty free. Fast fashion and eCommerce platforms that relied on this customs regime have been forced to rethink their business models.

Retailers may now attempt to bulk-ship goods to US warehouses during the 90-day window to avoid further disruption.

Supply chain experts say the fashion industry will continue to face high levels of uncertainty. The temporary nature of the deal, coupled with the risk of retaliatory tariffs on goods from countries like Vietnam and Cambodia, means many brands are proceeding with extreme caution. Some analysts warn that if brands rush to resume production, a surge in orders could overwhelm manufacturers and create a cargo capacity crunch, pushing air and ocean freight rates even higher.

The longer-term outlook remains unclear. Fashion companies continue to seek more flexible and diversified sourcing strategies, hedging against the risks of geopolitical instability. Industry leaders have urged policymakers to use the current window to work towards a permanent, predictable trading framework.

For now, the temporary tariff pause has delivered short-term relief, but it is widely viewed as a fragile reprieve rather than a definitive resolution. As one trade association put it, fashion brands will “enjoy this time” but remain braced for further twists in the turbulent global trade environment.

With decades of experience supporting leading fashion brands and retailers, we understand the unique demands of global fashion supply chains. EMAIL Andy Smith, Managing Director, to navigate today’s uncertainty and optimise your international logistics and sourcing strategy with confidence.

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