Trends to Watch

Talking Tariffs

Upcoming U.S. Maritime Service Fee on Chinese Vessels:

• Earlier this year, the Office of the U.S. Trade Representative (USTR) announced that, effective October 14, 2025, a service fee will be assessed on maritime transport services provided by Chinese operators and shipowners, as well as on services utilizing vessels constructed in China.
• Following consultations with our ocean carrier partners, Flexport believes that sufficient mitigation measures, including vessel rerouting and other operational adjustments, have been implemented to ensure that these fees will not be passed through to customers at this time.
• Accordingly, Flexport will not implement any surcharge related to the USTR maritime service fee at present. We will, however, continue to closely monitor developments and reserve the right, along with our ocean carrier partners, to implement such a fee in the future should circumstances require it.

U.S.–Japan Trade Agreement Tariff Rules Take Effect, Reshaping Import Costs and Compliance:

• As of September 16 (retroactive to August 7), a 15% baseline tariff now applies to most Japanese imports under the updated U.S.-Japan Agreement.
• Goods previously subject to duties below 15% will incur additional tariffs to meet the 15% threshold; goods already above that rate are unaffected but will need to report a special tariff code.
• Exemptions apply to key sectors including generic pharmaceuticals, certain natural resources, civil aircraft, and materials already covered by Section 232 (e.g., steel, aluminum, copper).
• Automobiles and auto parts move from 25% Section 232 tariffs to the new 15% baseline rate.
• U.S. importers should assess entries dating back to August 7 for refund opportunities and compliance risks tied to origin and classification.
• Future tariff relief is tied to Japan’s fulfillment of commitments, over $500 billion in U.S. investments and expanded purchases of American agricultural and energy exports.

Other Recent Developments:

• On September 12, Annex II was updated with additional tariff exemptions. The same announcement introduced Annex III, believed to be the long-rumored “unavailable natural resource” exclusion, but details remain unclear on scope, eligibility, and implementation timeline.
• Oral arguments are scheduled for the first week of November in the Supreme Court case challenging the legality of IEEPA fentanyl and reciprocal tariffs.
• The Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) and African Growth and Opportunity Act (AGOA) preference programs are set to expire on September 30. Without congressional action, both programs will lapse at month’s end. Lawmakers on the House Ways & Means and Senate Finance Committees have signaled bipartisan support for renewal, potentially by attaching extensions to active legislation like the NDAA.

Calculate and analyze your real-time tariff and landed cost impacts using the Flexport Tariff Simulator.

Ocean

TRANS-PACIFIC EASTBOUND (TPEB)

• Capacity and Demand:
  • The “pull forward” of shipments, where importers accelerate their purchases to get ahead of potential tariffs, has led to a weaker-than-expected season so far. This has resulted in an oversupply of goods in the market, causing a notable decrease in demand for new shipments and a quiet lead-up to Golden Week.
  • Because demand is low, some carriers are facing overcapacity. To manage this and prevent rates from falling further, they are implementing “blank sailings” (canceled voyages). The Premier Alliance, for example, has temporarily suspended its PS5 service, which typically runs from China to the U.S. West Coast. This is a direct response to the soft market and aims to balance supply with the current low demand.
  • The market for both the U.S. East and West Coasts is experiencing more supply than demand. There has been no pre-Golden Week rush, but space remains open especially on the East Coast.
• Container Incident at the Port of Long Beach:
  • Salvage and investigation operations remain in progress at the Port of Long Beach and aboard the ZIM Mississippi.
  • ZIM shared in customer communications on Wednesday, September 17, that it is coordinating with the relevant parties to resume cargo operations. Our operations teams have confirmed that discharge operations began during the first shift on September 17 (U.S. local time)
  • All containers related to the incident remain on hold by the U.S. Coast Guard during the official investigation. We will inform impacted clients as soon as their cargo is made available.
  • Visit our live blog for details on timelines, cargo release, General Average declarations, and cargo insurance.
• Equipment:
  • There are no major equipment shortage concerns overall.
• Freight Rates:
  • The Peak Season Surcharge (PSS) has been mitigated until October 15. In light of softened market demand, no PSS has been implemented for the pre-Golden Week period.
  • The September 15 General Rate Increase (GRI) has been fully withdrawn. With demand low, carriers have begun reducing rates to capture demand. Several carriers have extended rates to October 14.

FAR EAST WESTBOUND (FEWB)

• Capacity and Demand:

  • About 25% of FEWB capacity will be blanked during Weeks 40–41.
  • The scale of withdrawal is smaller than in previous years, indicating overall supply remains sufficient from the second half September to the first half of October.
  • Congestion at European ports has eased.
  • Due to inflation and high inventory levels, European retailers remain cautious with consumer goods imports.
  • Summer restocking is complete, and most pre-Christmas stocking has already been finished, leading to softer short-term demand.

• Freight Rates:

  • The SCFI Europe index stood at USD 1,154 per TEU last week, a decrease of USD 161.
  • Ahead of the Golden Week, carriers are under increased pressure to secure cargo, which is driving price competition. We can expect freight rates to continue to decline in the coming weeks.

TRANS-ATLANTIC WESTBOUND (TAWB)

• Capacity and Demand:

  • Antwerp: Yard utilisation exceeds 75%, with average dwell times of seven to eight days.
  • Rotterdam, Hamburg, Bremerhaven: Yard utilization remains between 75–85%, with vessel delays ranging from one to five days.
  • South Mediterranean (Piraeus, Genoa, Valencia): Heavy congestion continues, with vessel delays of three to six days.

• Equipment:

  • Equipment shortages persist in inland and regional markets, including Austria, Slovakia, Hungary, Southern and Eastern Germany, and Portugal.

• Freight Rates:

  • Overall capacity remains stable. Spot rates from North Europe to the U.S. East Coast are averaging $1,838-1,911 per 40’ as of mid-September, according to Xeneta. This reflects a ~5% decline since June and a ~25% drop compared to January 2025.

INDIAN SUBCONTINENT TO NORTH AMERICA

• Capacity and Demand:

  • Capacity to the U.S. East Coast: The tariff escalation that took effect on August 27 continues to drive softening demand from India. Supply is outstripping demand and we are seeing capacity management in full effect through September for Indian Subcontinent specific services. Although the tariff escalation is specific to India, countries like Pakistan, Sri Lanka, and Bangladesh rely on services specific to the Indian subcontinent to U.S. East Coast route for weekly capacity. Demand will likely remain status quo from those countries, but capacity will be reduced
  • Capacity to the U.S. West Coast: Capacity is widely available, given continued oversupply impacting major TPEB services that move cargo from the Indian subcontinent to the U.S. West Coast. Blank sailings have been announced, impacting direct services from Northwest India to the U.S. West Coast.

• Freight Rates:

  • Cargo moving to the U.S. East Coast: The market has softened due to the drop in demand from India in light of the tariff escalation. With carriers enacting capacity management strategies and as the tariff situation evolves, it is uncertain how much market levels will decline in the coming weeks.
  • Cargo moving to the U.S. West Coast: Oversupply on core TPEB lanes has continued to keep the market soft.

Air

• Northern China: The TPEB airfreight market is expected to see gradual normalization in the coming week. Apple has secured charter capacity for its New Product Introduction (NPI) projects from China to U.S. destinations, but actual demand has so far fallen short, leaving some of this capacity underutilized. Looking ahead, freight rates are likely to remain stable or show modest gains as demand gradually strengthens ahead of Golden Week, though less than year prior.
• South China: Ahead of Chinese Golden Week, no noticeable production surge from manufacturers. FEWB rates remain stable. Looking forward, on the TPEB lane, both rates and volumes are expected to increase in the coming week.
• Taiwan: Month-end bookings starting to pick up for TPEB with rising rates to the U.S. West Coast and East Coast. FEWB is holding steady.
• Vietnam: Demand and rates have increased, making space more limited. Bookings are now recommended at least 7 days in advance. Additionally, ongoing Apple NPI launches are impacting space availability ex-HAN.
• Cambodia: KTI Airport is currently backlogged, with no space available until September 25 due to national holidays from September 21 -24. Some factories may be closed and are expected to resume operations on September 29.
• South Korea: The current TPEB market reflects overall stable freight rates. A large portion of cargo from ICN consists of cosmetics bound for JFK and YYZ.
• Malaysia: Public holidays on September 15 and 16 have contributed to a decline in local demand, particularly on the TPEB trade lanes. This has resulted in a slight reduction in rates, while capacity remains generally available across most airlines. FEWB lanes remain stable, with no changes in rates or capacity.
• Thailand: BKK market climbed up slightly and expects to continue so in the 2nd half of September. Capacity is manageable overall with some congestion for LAX and ORD destinations.
• ISC: No particular highlights for the upcoming weeks.
• Pakistan: Urban flooding and monsoon rains continue. Local transporters warn that this will disrupt the supply chain and cargo flow, adding at least two extra days to total transit time. Expect delays and higher rates in the coming weeks.

(Source: Flexport)

Please reach out to your account representative for details on any impacts to your shipments.

North America Vessel Dwell Times

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Ocean Timeliness Indicator

Transit Times from China to the U.S. West Coast and U.S. East Coast experienced reductions, while the route from China to North Europe saw longer timelines.

Week to September 15, 2025

Transit timelines from China to the US West-Coast decreased by 0.5 days, falling from 32.5 to 32.0 days, while timelines from China to the US East-Coast decreased by 1.8 days. The timelines from China to North Europe saw a 0.9-day increase, moving from 60.0 to 60.9 days.

See the full report and read about our methodology here.