Tariff turbulence sends global freight rates up 16%

April 15, 2025 | 0 Comment

A wave of tariff-driven uncertainty has sent global exporters, including those in India, rushing to ship goods to the U.S. before a 90-day deadline. Triggered by Donald Trump’s tariff announcements, the scramble has sharply driven up freight costs and strained container availability.

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The global trade landscape is once again under strain as the re-emergence of U.S. tariff policies drives up freight costs and disrupts supply chains. The latest move by U.S. President Donald Trump to impose new trade levies and pause reciprocal tariffs for 90 days—announced on April 9—has triggered a rush among exporters worldwide to front-load shipments before the deadline. While countries like India benefit from reduced tariff levels at 10%, China remains excluded from this temporary relief, deepening global trade imbalances.

Indian exporters, in particular, are experiencing a sharp increase in freight costs amid heightened demand for container space. Drewry’s World Container Index reported a 3% rise last week in the cost of shipping a 40-foot container, reaching US$ 2,265. Industry experts expect a double-digit hike in freight rates in the short term as exporters scramble to dispatch consignments ahead of the 90-day window’s expiration.

This pattern mirrors earlier global reactions to tariff shocks. During Trump’s first term, the sudden imposition of tariffs on steel and aluminium led to significant cost increases for firms like the UK-based Goodfellow, which faced an additional £100,000 in shipment charges. The announcement had spurred companies to accelerate exports to avoid future levies, inflating shipping and air freight rates globally.

The ongoing uncertainty has left businesses hesitant to commit to long-term freight contracts, opting instead for the spot market, which offers more flexibility. Container availability is tightening further due to disrupted flows and rising demand, with logistics providers warning of inventory pressures at both loading and discharge points.

Meanwhile, global ports are already feeling the impact. Vehicle stockpiles are building up at Bremerhaven in Germany as carmakers pause U.S.-bound exports under the weight of 25% levies still in effect for automotive goods. Similar concerns are surfacing in Europe, where ports like Antwerp-Bruges are managing surges in Chinese electric vehicle imports, prompting calls to strengthen trade defenses against potential dumping.

India’s logistics sector faces added challenges, including Red Sea instability and reliance on Chinese-leased containers. Though government efforts like the Rs 25,000 crore Maritime Development Fund aim to build local capacity, achieving container self-sufficiency remains a long-term goal.

As trade routes realign and freight markets remain volatile, businesses must adapt quickly. Supply chain resilience, sourcing diversification, and logistical agility have become vital to navigating the evolving global trade environment.

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