Global trade alliances shifted notably this week as the U.S. and EU signed twin trade deals with India to spur supply chain diversification. Simultaneously, a court ruling in Panama forced Hutchison Ports to hand over key canal terminals to APM Terminals, while global spot rates tumbled as the pre-Lunar New Year rush fizzled out.
Weekly Market Update
The trade alliances worldwide have shifted significantly this week as the Western countries have solidified their commitment to a geopolitical shift away from their historical dependence on East Asia. The U.S. administration revealed a sudden agreement to significantly cut tariffs from 50% to 18% for imports from India as part of a move to mend damaged relations and encourage the relocation of manufacturing activities to the region. At the same time, the European Union finalizes its entire round trade negotiation with India to form a blanket trade deal. These two agreements are anticipated to revive the India-North America and India-Europe trade routes, which have significantly reduced their volumes in recent months. Industry analysts believe this trade agreements will result in a quick recovery or a "V-shaped” increase in booking for India’s exports as businesses seek to take advantage of the new regimes.
In an extraordinary legal move, the Supreme Court of Panama has withdrawn the concession agreements held by Hutchison Ports PPC, a subsidiary of CK Hutchison Holdings, to operate ports at the canal's Atlantic and Pacific entrances. After the ruling, the Panama canal commission has appointed APM terminals to run the Balboa and Cristobal terminals on an interim basis, transfers designed to maintain continuity at these vital trans-shipment hubs, despite opposition from Hutchison Ports, which has signalled its intent to take legal action. Of particular note to users of these terminals, to be operated by arguably two of the world's largest terminal operators, are trans-shipment dwell times during this administrative changeover.
The traditional pre-Lunar New Year (CNY) cargo rush has largely failed to materialize, creating a "soft" market environment rarely seen before the holiday. With demand weak, carriers are aggressively managing capacity through blank sailings to prevent a total rate collapse. Meanwhile, logistics networks in the U.S. are still untangling the mess left by "Winter Storm Fern," which snarled rail operations across the South and Midwest. While main lines have reopened, backlogs at key intermodal hubs like Memphis and Dallas persist.
Freight Rate Updates
Spot rates have slid for a fourth consecutive week, with double-digit drops on some lanes as carriers undercut each other to fill ships before the holiday shutdown.
• Asia to U.S. West Coast: Rates fell roughly 8% this week to $2,239 per FEU. The lack of a pre-holiday spike has left spot prices hovering near break-even levels for some carriers.
• Asia to U.S. East Coast: Prices slipped 5% to approximately $2,819 per FEU, erasing gains made in early January.
• Asia to North Europe: Spot rates dropped to $2,164 per FEU, down 9% week-over-week.
• Asia to Mediterranean: Rates softened to $3,048 per FEU.
• India to U.S. East Coast: This lane has seen the most dramatic correction, with rates plummeting to $1,212 per FEU—a 54% drop since August—though the new trade deal may set a floor here soon.
Short-Term Future Outlook
The immediate outlook is for "realignment." As manufacturing in Asia shuts down for the Lunar New Year, global volumes will be at their lowest for the year. However, there should be a two-speed recovery in March, with the East/West trades continuing to feel the effects while a sudden squeeze may be felt in the India out-bound trades as the new tariff reductions spark a sales boost there. Additionally, the business transfer from Hutchison to APM will be a key watch for reliability out of the trans-shipment hub in Panama.
