Container rates fall as trade and security risks mount

Container freight rates have fallen further as demand eases and shipping capacity increases. Drewry expects some additional downward pressure on the Asia–Europe trade next week, but geopolitical tensions, renewed insecurity in the Red Sea and uncertainty surrounding the new US tariffs continue to cloud the outlook. The Drewry World Container Index fell by 4%. As demand continues to ease and shipping capacity increases, Drewry expects freight rates on the Asia–Europe trade to edge down again next week, while rates on the Transpacific trade are likely to remain stable.According to Drewry, ongoing geopolitical tensions and uncertainty over US tariff policy are likely to continue shaping market conditions and freight rate developments in the weeks ahead. Concern is not limited to the Strait of Hormuz. The security situation in the Red Sea has also worsened markedly, with Iran-backed Houthi rebels in Yemen attacking tankers. A Brent crude oil price close to $100 per barrel — and even above that level yesterday — is putting upward pressure on marine fuel prices.According to Drewry, ongoing geopolitical tensions and uncertainty over US tariff policy are likely to continue shaping market conditions and freight rate developments in the weeks ahead. Concern is not limited to the Strait of Hormuz. The security situation in the Red Sea has also worsened markedly, with Iran-backed Houthi rebels in Yemen attacking tankers. A Brent crude oil price close to $100 per barrel — and even above that level yesterday — is also putting upward pressure on marine fuel prices. US import tariffsEuropean exporters are facing renewed uncertainty over US import tariffs. Today (24 July), the temporary 10% universal tariffs introduced by President Trump expire. They were imposed after his previous tariff regime was struck down by the Supreme Court. For 60 countries, including those in Europe, the administration has now found a new legal basis for imposing tariffs, namely alleged links to forced labour.Following lengthy negotiations, the trade agreement between the US and the EU, which was agreed last summer, was formally ratified by the Council of the EU last month. Under the agreement, a maximum tariff of 15% was set on most European goods. Based on the current information, the new 10% tariff will not be added on top of that. Other countries, such as Japan and China, are facing tariffs of 12.5%.Closure of a key transport route in the NetherlandsOn 18 July, an immediate ban on heavy goods vehicles was imposed on the Merwede Bridge near Gorinchem in the Netherlands. The steel structure has proved to be weaker than previously thought. Two new bridges are due to be built over the coming years to reduce congestion on the A27 motorway, but they are not expected to be completed before the end of 2031. It is still unclear whether lorries will remain banned from the bridge until then.Lars Ahsman, of the Dutch trade and logistics association Evofenedex, said in a statement: “We saw in 2016 what the cost of such a closure can be. The economic damage then amounted to half a million euros per day. That must not happen again. What businesses need most now is clarity on how long the closure will last. At the same time, this situation once again shows that postponing maintenance of vital infrastructure ultimately results in higher economic and social costs.”