Transpacific market braces for Chinese New Year shutdown
Global trade order split into two distinct paths: deep bilateral integration among non-U.S. powers, and aggressive “tariff-as-ultimatum” tactics from Washington. The signing of the EU-India Free Trade Agreement represented a landmark achievement in “de-risking” for Europe, effectively creating a massive economic counterweight to both Chinese and American protectionism. However, this progress was overshadowed by the U.S. threat of a 100% tariff on Canadian goods, a move that fundamentally challenged the stability of the North American trade bloc. As gold prices surpassed $5,000 per ounce and the World Trade Organization struggled to find a unified voice at Davos, the week concluded with global markets bracing for a year defined by extreme policy volatility and the breakdown of traditional regional alliances. Freight Right Global Logistics explains what happened this week and looks at what’s to come.
This Week’s Ocean, Air and Freight Markets
China-US Ocean Freight Market:
The transpacific shipping corridor continues to see a significant downward trend in rates as the market approaches the Lunar New Year holiday. Current spot pricing has retreated to levels not seen since late last year, signaling a near-total erosion of earlier rate hikes, according to Freight Right’s TrueFreight Index.
CEA to USWC: Rates have dropped further than anticipated, currently sitting between $1,600 and $1,650 per container. This represents a significant decline and places pricing at levels reminiscent of November 2025.
CEA to USEC: Rates for the East Coast have followed a similar trajectory, falling to approximately $2,400. Carriers are now operating on thin margins, with pricing approaching the breakeven point where space is being sold nearly at cost.
This Week Explained:
Several factors went into shaping why this week’s transpacific spot rates took the shape that they did.
Starting first with unexpected rate erosion. Despite previous expectations that rates would hold steady until the end of February, they have continued to drop as carriers struggle to secure volume.
Shipping volume was another factor. The “pre-holiday rush” has largely concluded, leaving only minimal shipments, described as “breadcrumbs,” remaining in the system.
Lastly, there was the longstanding market sentiment. Importers appear to have front-loaded or paused shipments in response to earlier geopolitical and tariff uncertainties, leading to a premature softening of demand.
Looking Ahead:
The immediate outlook suggests a market that is essentially “done” for the pre-Chinese New Year (CNY) period. While rates may stay at these low levels or see minor adjustments for the remainder of this week and next, a complete standstill is expected by the end of next week as factories in China close.
Predictions for February indicate a dormant period with virtually nothing left to move as the holiday takes full effect. Shippers can expect a quiet month followed by a potential post-holiday reset in March, though any recovery will depend heavily on the evolution of U.S. consumer demand and the clarification of tariff policies.
China-US Air Freight Market:
The air freight market has entered its peak volatility phase as the industry nears the CNY shutdown. Rates have seen a sharp week-over-week increase as capacity tightens and shippers scramble to clear inventory before factory closures.
CEA to USWC: Rates for West Coast destinations like LAX have surged significantly from the previous week’s lows. In Week 3, high-density cargo was priced as low as $2.07 per kilogram, but Week 4 data shows these rates have jumped to $3.40-$5.18 per kilogram. This represents a week-over-week increase of approximately $1.30-$1.50 per kilogram for standard shipments.
CEA to USEC: Rates to the East Coast, including JFK, have also climbed steadily. After hovering around $4.59-$4.89 per kilogram in Week 3, prices have now pushed into the $5.18-$5.48 per kilogram range. This reflects a more moderate but consistent increase of roughly 60 cents per kilogram compared to the prior week.
This Week Explained:
Several factors influence this week’s air freight market. Key factors include:
- The Final Pre-Lunar New Year Rush: With Chinese New Year holidays imminent, factories are pushing all remaining inventory out of their warehouses to avoid holding stock during the month-long shutdown.
- Space Compression by “Big Fish” Retailers: Large enterprise entities like Tesla and major e-commerce players took up a massive amount of available aircraft space early in the month. This has left smaller and medium-sized shippers fighting for the remaining high-cost “spot” capacity in the final weeks.
- Geopolitical and Tariff Caution: Recent threats of 50% tariffs on goods entering the U.S. have created a sense of urgency for some importers to land their products before any potential policy shifts occur.
- Lack of Organic U.S. Demand: While rates are climbing due to seasonal capacity constraints, they remain below historical "sky-high" levels (such as $7.00-$8.00 per kilogram) because overall U.S. consumer demand is still relatively weak.
Looking Ahead:
The high-rate environment is expected to persist until the formal start of the holiday period around Feb. 2, which aligns with the current validity of many airline quotes. Space will likely remain at a premium through the second week of February as the final backlogs are cleared.
Once factories close, the market is predicted to enter a “dead” period for two to three weeks where booking activity will be nonexistent. The long-term outlook for March suggests a potential for rate reductions if volume does not rebound significantly after the holiday. Shippers should be prepared for a quiet Q1 as the market settles and geopolitical uncertainties regarding new tariffs become clearer.
This story was produced by Freight Right Global Logistics and reviewed and distributed by Stacker.
