Temporary truce in the trade war – geopolitics dictates freight rates

Maritime transport accounts for over 90% of global trade. Shipping is closely tied to the global geopolitical situation, which is currently driven in large part by the unpredictable trade policy of the United States. Consequently, any disruption along mritime trade routes directly impacts the global economy, far beyond the regions directly involved. The ongoing trade war between the U.S. and China is also influencing maritime transport from China to Europe. But how exactly?

The high tariffs imposed by the U.S. on Chinese goods have led to a significant drop in bookings on the transpacific route, resulting in what is known as "blank sailings" – the cancellation of individual sailings due to insufficient demand. This ultimately reduced available cargo space and caused freight rates to rise. However, in mid-May, the U.S. administration decided to temporarily reduce tariffs, which led to a week-over-week increase in container space bookings of over 100%. Currently, trade relations between the two countries appear to be stabilizing, thanks to recent talks in London between Donald Trump and Xi Jinping, during which both leaders agreed on reduced tariffs. These developments were certainly influenced by rulings from U.S. courts that recently found some of the President’s imposed tariffs to be unlawful. Still, it remains difficult to predict how long this state of affairs will last.

From experience, we know that there is a strong correlation between developments in U.S.-China relations and the state of China–Europe trade. The dramatic decrease and subsequent surge in trade flows between the world's two largest economies causes major fluctuations in transport capacity availability and has a direct effect on other trade routes. When transport capacity is freed up due to tariff tensions and can't be used on the China–U.S. route, 

it is redirected elsewhere, including to Europe. This phenomenon exerts downward pressure on freight rates for westbound services to Europe, affecting Polish clients as well.
In the coming weeks, we may still experience port congestion in China due to the surge in shipments to the U.S. However, in light of the agreements mentioned earlier, gradual stabilization on the China–U.S. trade lane and normalization of rate levels are expected. Nevertheless, it is important to stay alert and monitor the situation closely – many analysts remain skeptical about the actual value of the London agreements, viewing them merely as temporary political gestures.

Multifaceted geopolitical challenges

U.S. tariffs are not the only issue we currently face. We are dealing with multiple geopolitical tensions in various parts of the world. These include not only U.S.–China relations, but also the unstable situation in the Middle East, which affects oil and goods flows through key maritime routes; strained relations between India and Pakistan that may disrupt regional trade; the ongoing war in Ukraine with its continuing limitations on trade and transport; persistent threats to shipping through the Red Sea, one of the world’s most crucial trade corridors; and rising tensions around the Taiwan Strait, which could impact global electronics trade.

All these geopolitical factors have a profound impact on the container shipping market, affecting transit times, freight rate levels, service quality, container availability, and causing port congestion. A likely scenario in the coming years is the continuation of an " highly volatile market" characterized by high volatility in freight rates.

Redefining supply chains in response to uncertainty

In the face of this unprecedented uncertainty, a wise approach for companies is to diversify their supply chains and adopt a strategic stance on transport orders. As an operator, we can support businesses by implementing various ocean freight strategies. Securing part of the containers under long-term contracts provides price stability and high service quality – especially important for goods with regular demand and critical to business continuity. At the same time, cost-sensitive shipments can rely on the spot market, though companies must remain aware of the associated service quality risks and potential exposure to rate increases.

In this complex reality, logistics operators are taking on an increasingly important role – not just as transport service providers but as strategic partners and advisors to their clients. Logistics experts closely monitor geopolitical developments, analyze market trends, and keep clients informed of upcoming changes, enabling them to make well-informed business decisions. With expert knowledge and access to up-to-date market insights, they help companies choose optimal transport strategies, guiding them through the turbulent waters of today’s global trade.