Freight rates are coming down.. So shipping should get cheaper.. Right..??
For the past few months, we have seen freight rates climbing on the back of tariff uncertainty, frontloading, capacity constraints and geopolitical disruptions. Now that the frontloading rush has largely passed, rates on several trades, particularly the Transpacific, are beginning to soften.. On the face of it, that sounds like good news for shippers..
But does a lower freight rate automatically mean lower shipping costs..?? Not quite, as per Dimerco’s latest Asia Pacific Freight Report which is very interesting to say the least..
As the report points out:
“The frontloading wave has passed its peak… transpacific rates are coming off their highs and Europe looks set to follow. But the cost floor isn’t moving: fuel and canal surcharges won’t fall with demand, so expect cheaper space, not cheaper shipping.”
The freight rate is only one component of what you ultimately pay to move cargo.. Bunker surcharges, peak season surcharges, canal-related costs, war-risk premiums, insurance and various carrier charges don’t necessarily fall simply because the base ocean freight rate has softened.. So while you may negotiate a lower freight rate, your overall transport cost may not reduce by the same margin..
Sourcing or budgeting decisions should not be based purely on freight rates..
That is just one of the many practical observations in this month’s report..
The report also examines why the air freight market is increasingly being driven by AI and semiconductor demand rather than traditional e-commerce, what the latest geopolitical developments could mean for supply chains, how changing tariff policies may influence sourcing decisions, and provides market intelligence across Asia, Europe, North America and Mexico..
If your business imports from, exports to, or sources through Asia, there is plenty in this report that goes beyond freight rates and provides useful context for the months ahead..
