US tariffs squash shipping rates, threaten carrier returns: Ocean shipping rates have dropped to their lowest point since January 2024, a slump largely driven by US President Donald Trump’s year-long tariff bonanza, Reuters reports. The impact could be seen on the notable industry metric Drewry World Container Index tracking rates for transporting a 40-foot container — which slipped to a 20-month low of USD 1,669 per unit as of last Thursday

Straining the bottom lines of major carriers: “Rates have fallen below leading-cost operators' break-even for the first time since late 2023,” ocean shipping analyst and Managing Director at Jefferies Omar Nokta told the newswire. For example, the Shanghai–Los Angeles route rates dipped around 58% y-o-y to USD $2,196 — a figure significantly below the USD 2,200 benchmark that carriers require to break even, Nokta said.

To make matters worse, vessel supply remains too high: To mitigate income loss and manage capacity, carriers are skipping port calls, slowing down or idling ships, canceling sailings, and scrapping older vessels, experts say. Despite weakening rates, major industry players like Maersk, Hapag-Lloyd, and Cosco are still receiving delivery of new container ships, pushing up capacity in an oversupplied market. Cyclical overcapacity is expected to peak in 2027, resembling a similar crisis point in 2016, supply chain advisory Sea-Intelligence said.

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