Container freight rates are expected to remain low for the remainder of the financial year, largely influenced by the uncertainty in global trade stemming from the unpredictable tariff policies of former US President Donald Trump. Industry experts report a surge in Indian exports to the US, as exporters hurried shipments before the implementation of a significant 50% tariff increase on Indian goods scheduled for August 27. This urgency led to an 18% increase in exports to the US, which reached $40.39 billion during April-August 2025. In comparison, India’s overall exports rose modestly by 2.5%, totaling $184.13 billion in the same timeframe. Meanwhile, China’s exports to India rose by over 10% to $51.57 billion, indicating a trend of increased trade activity.
Ajay Sahai, the director general of the Federation of Indian Export Organisations (FIEO), anticipates a 10-15% correction in sea freight rates due to an oversupply in capacity amidst weakened global demand. He pointed out that the economies of the US and Europe are explicitly showing signs of slowing growth, which, combined with persistent inflationary pressures and recession risks, could significantly impact world trade dynamics.
According to Drewry’s Container Forecaster, the supply-demand balance is expected to weaken in the latter half of 2025, leading to a further reduction in spot container rates. The World Container Index has dropped 6% this week, now averaging $1,913 per 40ft container, down from over $4,000 a year prior. For the South East Asia to East Coast North America route, the rate has decreased from $2,900 to $2,600 in just ten days, illustrating a remarkable decline from last year’s rate of $5,500.
Logistics firms are experiencing varying trends across different sectors. Bhavik Mota from AP Moller – Maersk noted that while automotive shipments have sharply declined and shrimp exports remain vulnerable, the fast-moving consumer goods (FMCG) sector is currently stable, although future fluctuations are expected. Pharmaceutical exports remain robust, yet uncertainty is causing a slowdown in shipments to North America.
Smaller Indian exporters are feeling the effects more acutely, with some reportedly canceling export orders due to high US tariffs. Smaller businesses struggle more significantly, as larger exporters can typically absorb losses better. About 20% of some exporters’ volumes are bound for the US, and they are facing substantial hurdles.
However, not all export markets are grim. Improved relations with China are reflected in rising Indian imports ahead of the Diwali festive season. Drewry’s Intra-Asia Container Index (IACI) rose by 5%, indicating a healthier regional trade environment.
Industry insiders caution that unless there are tariff reductions from the US, the long-term ramifications could exacerbate pressures on global supply chains, ultimately resulting in increased costs for end consumers.
