Ocean Freight Market
The White House has announced a reduction in the reciprocal tariff on Chinese imports to 10% as part of a 90-day pause starting May 14, 2025. This adjustment reduces the rate from 34%, as set by Executive Order 14257 on April 2, 2025, by 24 percentage points. Media reports of a 30% total rate reflect the combination of a 20% IEEPA tariff and the 10% reciprocal tariff. Note that if the shipment is subject to Section 232 tariffs, the 10% reciprocal tariff does not apply—instead, the 25% Section 232 tariff will apply.
The updated China duty rate structure will be: MFN Rate + Section 301 (7.5%–25%) + IEEPA (20%) + Reciprocal (10%).
For those under Section 232, it will be: MFN Rate + Section 301 (7.5%–25%) + IEEPA (20%) + Section 232 (25%).
We’re awaiting the Federal Register Notice (FRN) for the exact end date of the 90-day pause and specific details on the May 14 implementation, including in-transit rules.
The full White House joint statement is available in the provided link – here.
In the Trans-Pacific market, 34% of capacity was cancelled in late April/early May, with demand seeing a very short-lived drop pre-trade negotiation. Currently, 52 container ships are crossing the Pacific (up from May 2024/2023), against a January-April average of 55–59. LA/LB ports have 15 ships on berth (below the usual 20), hinting at congestion risks. Freight rates are likely to spike as importers address backlogs, with ocean rate hikes expected. Logistics challenges, like container shortages in China and limited US trucking capacity, may arise due to the surge in backlog shipping. We are advising clients to secure bookings early to avoid delays, as larger importers may get priority.
The US-UK also reached a trade deal on May 8, reducing tariffs on British cars (from 27.5% to 10% for up to 100,000 vehicles), steel, and aluminum, while maintaining a 10% base tariff on most UK goods. The UK removed tariffs on US ethanol and granted tariff-free beef access (13,000 metric tonnes). The deal opens approximately $5 billion in US export opportunities, including agriculture and aerospace, and establishes a framework for future digital trade and technology partnerships. Final details are still being negotiated. This provides some clarity on expectations for non-China trade deals to come over the next few months.
Conditions in the Red Sea persist. However, as the USA and Yemen’s Houthis come to an agreement for a ceasefire, it is unclear if safe shipping will return to the region. Though Yemen’s Houthis agree to stop stacking vessels in the Red Sea and Bab al-Mandab Strait, leaders of the group indicate their campaign against Israel will continue. Without a complete ceasefire, escalation remains possible. Carriers will not resume shipping through the region until war risk insurance rates are revised, which is unlikely while escalation remains a threat.
Airfreight Market
Successful negotiations between the USA and China to reduce tariffs are expected the elevate booking demand in the coming weeks. As capacity returns to normal post-holiday in China and booking demand spikes in light of reduced tariffs, we expect spot rates to trend upward in the coming weeks. Space continues to be dominated by e-commerce and small-pack freight. We strongly urge clients to confirm space in advance for large shipments or volumetric freight. It is anticipated that capacity and volumes will shift over the coming weeks, resulting in temporary instability as airlines work to redeploy aircraft to higher demand lanes.
The U.S. Market
Market Overview:
Successful negotiations to reduce tariffs from multiple origins signal potential surges of inbound freight. Ports and truckers brace for increased volumes. Downturns in operations with dour projections resulted in a contraction of trucking capacity, as well as slow downs at ports. Considering revised projections now showing a swell, cargo handlers are scrambling to be prepared. Delays in processing freight is expected at all ocean and air terminals as an influx of freight lands in the US. Domestic trucking capacity is anticipated to be put under stress in coming weeks and months.
USWC: Good conditions reported, volumes down.
USEC: Good conditions reported, volumes down
USMW: Good conditions reported, rail lines confirming high capacity available.
USSW: Good conditions reported, volumes down
Janel Group continues to closely monitor the market and port situation. Updates will be provided as they come available. To secure a booking or explore additional options for your supplier, please reach out to your Janel Group Representative.
Director of Procurement and Strategic Partnerships
Sr. Pricing & Commercial Support Analyst