Container shipping rates have started to cool down in the past weeks as early frontloading activity fades, according to a new Freightos analysis.

The digital freight booking platform said Asia to N. America West Coast rates climbed more than US$3,000/FEU and 115% from the end of May to mid-June to a high of about US$6,000/FEU. But by the end of last week, these demand and capacity factors combined to push transpacific container rates down sharply.

Last week's average of US$3,388/FEU is also 43% below the June peak, though this price is still 22% higher than the end of May.

Freightos noted that rates to the East Coast behaved similarly, though not as dramatically as demand was stronger on the shorter West Coast lane and carriers focussed capacity additions to the West Coast as well.

East Coast rates climbed 80% from late May to mid-June to about US$7,200/FEU but closed the month 15% lower, at US$6,116/FEU.

"This dramatic rate deterioration this early in the typical peak season months has carriers reportedly considering capacity reductions soon," the analysis said.

"Even with these tariff-driven pressures that pushed rates up sharply in June, however, the peaks for both lanes were at least US$1,000/FEU lower than prices a year ago and may point to overall capacity growth in the container market," Freightos added.

Asia–Europe and Mediterranean rates each closed June up 25% month-on-month at US$2,969/FEU and US$4,222/FEU respectively.

Freightos noted that Red Sea diversions drove another early start to peak season on this lane this year, with some port congestion and capacity shifts to the transpacific also supporting rate increases at the start of June and again mid-month. 

But prices on both lanes cooled toward the end of the month suggesting market conditions may not support upcoming July GRIs, though carrier plans to reduce capacity significantly – an unusual step during peak season – could help push additional rate increases through.

"Like the transpacific, rates are significantly lower than a year ago on these lanes, suggesting capacity growth is putting downward pressure on rates even as carriers continue to avoid the Red Sea," the analysis said.

Freightos noted that the US's May 12th tariff reduction on Chinese goods spurred a rebound in China-US container volumes that seems to be losing steam.

"Possibly expecting a longer demand surge, carriers have also added what is now too much capacity to the transpacific, especially to the West Coast," it added.

Meanwhile, in air cargo, the US suspension of de minimis eligibility for Chinese goods drove a reported 43% drop in China-US low-value shipment volumes in May.

With that demand drop, carriers have shifted much of the freighter capacity that was servicing China-US e-commerce goods to other lanes.

With this capacity reduction, Freightos Air Index China-US rates have remained stable at about the US$5.30/kg mark since May, despite reports of cooling demand in the last couple of weeks. 

Capacity that's been shifted to other lanes may be one factor in China-Europe rates cooling about 8% since early June to US$3.45/kg.

The Freightos analysis said some frontloading out of South East Asia ahead of the July US tariff deadline may explain SEA-US air cargo rates climbing 11% to US$5.17/kg since early May.

The White House’s temporary suspension of reciprocal tariffs is set to expire July 9, prompting a flurry of trade negotiations with top U.S. partners.

Freightos noted the deadline looms as talks aim to wrap after the July 4 holiday, with potential unilateral tariff decisions ahead. Both the U.S. and EU expressed optimism about reaching a deal, while Canada, facing its own July 21 deadline, dropped a proposed digital-services tax after trade talks with the U.S. stalled.

President Donald Trump said last week that the U.S. finalized a trade agreement with China, which includes resuming rare earth metals exports, though tariff details remain undisclosed.