Ocean Freight Market
Capacity: Blank sailings continue through October as China closes to observe the Mid-Autumn Festival. Capacity is expected to spike in the following weeks after the holiday. As we move into firmer holiday shipping season, higher levels of capacity are predicted to remain on the market. Adverse weather conditions may inject additional sailing disruptions and impact capacity in coming weeks. Asia-US import volumes turned negative year-over-year since May after early growth. September typhoons worsened congestion in Shanghai, Ningbo, and Qingdao, causing delays. Blank sailings surged (up significantly) as carriers like MSC, Maersk, and Hapag-Lloyd cancel up to 8% of Trans-Pac services through mid-October; National Day will extend blanks, with post-holiday capacity spike expected.
Demand: Booking volumes took expected dips due to Mid-Autumn Festival closures. Temporary spikes in demand after the holiday are anticipated. However, a softer peak season means these spikes are not forecasted to linger. Asia-US trade sees declining rates amid softening demand and aggressive capacity cuts ahead of China's National Day (Oct 1-7). Post-Mid-Autumn Festival booking dips led to temporary spikes that faded, with Trans-Pac spot rates at multi-month lows since May. A softer peak season limits sustained recovery. Early October demand marks the quietest holiday peak in years.
Pricing: As demand softens, spot rates have trended downwards. October 1 increases did not materialize. However, a mid-month increase may see actualization. It is expected that October 15 GRI would not sustain and erode over the following weeks, unless demand surges. FAK rates stable through Oct 14 before post-National Day capacity return. Spot rates may uptick mid-month but unlikely to sustain without demand surge; overcapacity looms through year-end.
Trans-Pac General Rate Increases (GRI):
October 1 GRI cancelled.
October 15 GRI announced, partial implementation expected.
November 1 GRI announced.
Airfreight Market
Capacity: Tight global transportation persists. Flight cancellations schedules during Mid-Autumn Festival closures created a temporary scarcity. In addition, last-minute bookings stressed capacity in the days before the holiday. Post-holiday congestion is anticipated. Carriers continue to reroute capacity to European markets amid tariff increases, revisions, and De Minimus changes.
Demand: Peak season underway via new tech launches, but growth moderate due to supply chain adjustments and sharp China-USA e-commerce decline from customs changes. Some lane strength evident, with seasonal load factors below norms yet trending upward marginally.
Pricing: Week-over-week spot rate gains across key China-origin routes reflect holiday demand pressures and capacity constraints, showing sharp overall upward trajectory despite mixed results on select lanes.
The U.S. Market
USTR Section 301 Fees on Chinese-Operated Vessels and China-Built Ships: The U.S. Trade Representative's (USTR) Section 301 service fees—$50 per net ton (NT) for Chinese-owned or -operated vessels, and phased rates starting at ~$18/NT (or $120 per container) for China-built vessels (regardless of operator)—are set to begin on October 14, 2025, with incremental increases to $140/NT by 2028. These remain on track for implementation, with no reported delays as of early October.
Implementation Probability: 90-95% likelihood of on-schedule rollout on Oct 14, supported by finalized April actions and broader reciprocal tariff measures (e.g., 10% universal hikes in Feb/Apr 2025). This assessment factors in industry pushback on economic risks, but carriers' proactive preparations reduce delay odds. A 5-10% risk persists from ongoing exclusions reviews, which expire November 29—monitor for extensions.
Next 60 Days (Sept 16–Nov 15): Pre-Implementation Rush (Now–Oct 13): Carriers like COSCO and HMM are retaining core fleets on transpacific routes to maintain service stability, potentially absorbing up to $1.5B in fees for COSCO in the first year. Meanwhile, non-Chinese lines (e.g., Maersk, Hapag-Lloyd, ONE, Yang Ming) continue accelerating reallocations of China-built vessels to non-U.S. trades, tightening U.S.-bound capacity and potentially lifting spot rates 5-10% in the short term. CMA CGM and Zim have committed to relocating all affected China-built vessels by the deadline, minimizing exposure—though minor delays could trigger initial fees. Overall, top carriers report minimal service disruptions from these shifts.
Post-Implementation (Oct 14–Nov 15): Fee collections commence, with non-Chinese carriers largely insulated due to reallocations. Monitor for surcharges from Chinese lines (e.g., COSCO) and any service adjustments if rates fail to recover demand softness. Market-wide, expect 2-5% rate softening if excess capacity eases transpacific imbalances, aligning with Q3 trends.
Preparation for October Bookings:
Prioritize non-Chinese carriers (e.g., Maersk, ONE) to sidestep fees—secure space now amid reallocations.
Budget 5-15% for potential surcharges from COSCO/HMM; negotiate clauses for fee passthroughs.
Diversify routes (e.g., via Mexico/Canada) and monitor USTR updates weekly. Front-load Q4 volumes by the end of September to lock in pre-fee rates. Stakeholders: Track Linerlytica-style analyses for fleet shifts.
U.S. Regional Port/Rail Conditions:
USWC: Conditions remain solid, with the Zim container incident at Long Beach (Sept 9) fully resolved—no lingering delays. High yard utilization (~70%) continues, alongside average rail dwell times of 4.5 days. No widespread berthing congestion, though tariff-driven rerouting is adding mild upstream pressure on rail networks.
USEC: Stabilizing overall, despite localized challenges. Savannah sees moderate congestion (4-6 day vessel waits) from post-Labor Day cargo surges, with steady import rail and terminal ops; Europe service realignments may introduce 1-2 day delays. Mild backups at Southeast gateways persist due to cross-border parcel issues and seasonal volumes, offset by carrier adjustments—anticipate holiday buildup. Congestion remains moderate per key trade KPIs, with no major disruptions. Hurricane Imelda, after passing over Bermuda as a Category 2 on Sept 30–Oct 1, has weakened to a tropical depression and is forecast to cause only minor wind/rain disruptions at Southern U.S. and Florida ports—no significant port closures expected.
USMW: Inland rail to Midwest hubs (e.g., Chicago) operates efficiently, with low dwell times bolstered by e-commerce diversions from coastal routes.
USSW: Slight congestion across Gulf ports, but Houston is handling reinstated terminal fees smoothly without major backups. Gulf and Florida ports are in hurricane watch mode through season's end (Nov 30)—stockpile contingencies for weather events.
Janel Group continues to closely monitor the market and port situation. Updates will be provided as they become available. To secure a booking or explore additional options for your supplier, please reach out to your Janel Group Representative.
Sr. Director of Commercial Strategy
Sr. Pricing & Commercial Support Analyst