Supply chains brace for disruption

Spot freight rates from India to US rise 10%, but may not spike in near-term

- DHRUVAKSH SAHA New Delhi, 7 April

US President Donald Trump's April 2 reciprocal tariffs have triggered a frenzy in global supply chains, with exporters across the world uncertain about the future. This has also spurred ambivalence among transporters and shippers, who have to plan their logistics months in advance to service global trade.

Since Trump's announcement, spot market freight rates from India to the US East Coast have jumped by 10 per cent to nearly $4,000 per 40 feet container (as of April 4), according to Oslo-based analytics firm Xeneta.

Experts in India and abroad feel while the situation is currently manageable, the next 2-3 months will be extremely crucial for global logistics, with risks of a sudden rush due to changing geopolitics, a lack of clarity over shipping routes due to conflicts, or a large-scale restructuring of supply chains in the offing. Average spot rates from the Far East into the US East Coast increased 8 per cent and the US West Coast 15 per cent on April 1. They are, however, down 43 per cent and 49 per cent since January 1 respectively.

For context, global sea freight rates had been going down over the past few months due to a previous build-up which had caused rates to spike abnormally in 2024. Many US shippers are right now at the point of agreeing to new long-term ocean container freight contracts coming into effect on May 1, so this puts them in an extremely difficult position.

Xeneta does not foresee freight rates going up in the near-term, particularly due to the moderation trajectory that has been prevalent in 2025. However, the Drewry World Container Index—a global benchmark index which measures weekly ocean freight rates for eight major east-west routes—rose on April 3 for the first time since January, which the firm said was due to cancelled sailings.