Key insights:

1. Tariffs are no longer just headlines—they’re hitting prices. US consumer inflation rose 2.7% in June, likely reflecting delayed effects of past frontloading and new tariffs. With the US set to impose 30% tariffs on EU and Mexico by August 1, and the EU eyeing $84B in retaliatory duties, importers should brace for higher landed costs and increased volatility in sourcing decisions.

2. Ocean freight rates are sliding fast—despite Red Sea disruptions. Asia–US West Coast rates dropped 24% last week to $2,369/FEU, driven by weak peak season demand and proactive carrier capacity cuts. Asia–N. Europe and Mediterranean rates are also soft and even with the Suez mostly avoided, demand weakness is overriding geopolitical constraints—creating a short-term pricing window for opportunistic shippers.

3. Air cargo is under pressure too—but capacity bets are still on. Air rates from China to North America fell 22% to $4.34/kg, reflecting sluggish e-commerce demand. Yet, long-term optimism remains in some pockets: Qatar Airways just ordered up to 210 Boeing jets. Importers relying on air freight may benefit from current rate softness, but long-term fleet growth could reshape capacity dynamics.

Ocean rates - Freightos Baltic Index:

• Asia-US West Coast prices (FBX01 Weekly) fell 24% to $2,369/FEU.

• Asia-US East Coast prices (FBX03 Weekly) fell 5% to $4,888/FEU.

• Asia-N. Europe prices (FBX11 Weekly) increased 4% to $3,509/FEU.

• Asia-Mediterranean prices (FBX13 Weekly) fell 4% to $3,802/FEU.

Air rates - Freightos Air index

• China - N. America weekly prices fell 22% to $4.34/kg.

• China - N. Europe weekly prices stayed level at $3.35/kg.

• N. Europe - N. America weekly prices fell 1% to $1.79/kg.

Analysis

It looks like tariffs are finally starting to show up in US consumer prices, with inflation rising 2.7% in June (AP). Importers have spent the last five years learning to frontload shipments wherever possible (lessons learned from COVID, the Evergiven, wars, trade wars and bad weather), which may have delayed the blow. But that buffer’s now run out...and things may escalate. The EU is prepping retaliatory tariffs on $84 billion in US goods (WSJ), just as the US plans to hit both the EU and Mexico with 30% duties starting August 1 (Reuters).

Even with ongoing Suez Canal disruptions, falling demand has kept ocean rates under pressure. A weak peak season has driven spot prices down fast. Asia–US West Coast rates dropped 24% last week to $2,369/FEU, while East Coast prices slid 5% to $4,888/FEU. Asia–Mediterranean prices dipped 4% to $3,802/FEU, though Asia–Northern Europe bucked the trend, climbing 4% to $3,509/FEU. Carriers are reacting quickly—transpacific capacity has already been cut by nearly a quarter (Kuehne+Nagel).

These low prices persist despite near-total rerouting around the Suez. In related news, the rescue operation for crew from the Eternity (Lloyd’s List)—attacked by Houthi forces last week—has concluded. Of 25 crew members, ten were recovered from the sea, while six were reportedly taken hostage.

Further east, signs of a post-conflict rebuild are emerging. Syria just signed an $800 million deal with UAE-based DP World to redevelop Tartous port (Maritime Gateway). This follows major infrastructure pacts like a 30-year CMA CGM agreement for Latakia and a $7 billion energy deal, in part supported by eased US sanctions that create space for investment.

In air cargo, weak demand continues to weigh on rates. China–North America prices dropped 22% to $4.34/kg, while China–North Europe held steady at $3.35/kg. Rates from Northern Europe to North America fell 1% to $1.79/kg. Still, confidence seems high in the long term—Qatar Airways announced a landmark order for up to 210 Boeing widebodies, with options for 50 more (Boeing).

Containerized Freight Rates from the Freightos Baltic Index

FBX Lane

Global

Asia -

US West Coast

Asia -

US East Coast

Asia -

North Europe

North Europe -

US East Coast

asia-Med

This Week

$2,542

$2,369

$4,888

$3,509

$1,929

$3,802

Last Week

-8%

-24%

-5%

4%

0%

-4%

Last Year*

-49%

-70%

-45%

-58%

7%

-51%

vs 2019

81%

44%

66%

152%

148%

-2%