Shipping costs dip despite strong import demand
Global container shipping prices continue to dip, even as import demand into the United States remains strong. Freight costs have reached or are nearing prepandemic averages.
- Container shipping costs across all freight lanes are down 8% from last month and down 34% from a year ago.
- In April, U.S. container imports rose 1% month over month and 9% year over year. Import volumes surpassed the 2.4 million TEU benchmark for the second time this year.
- Year-to-date imports are up nearly 9%, driven in part by companies frontloading shipments to avoid U.S. tariffs — including a 145% tariff on Chinese goods implemented on April 9, which was recently reduced to 30% for 90 days.
U.S. shipping companies are preparing for a surge in shipments out of China and a rise in shipping after the United States and China agreed to cut tariffs for 90 days.
Yes, but the executive director of the Port of L.A. cautioned that the 90-day tariff rollback is unlikely to trigger a sudden surge in cargo volume. He expects May imports to drop by about 25% year over year because companies frontloaded inventory ahead of last month’s tariff announcements and paused or canceled new orders. But he also expects spot rates to climb up as carriers shift capacity back to U.S.-China shipping lanes.
The U.S. trucking market remains soft despite some signs of tightening capacity. Load-to-truck ratios on DAT softened slightly in May compared to April but remain elevated year over year — particularly for flatbeds.
- Class 8 (semi) truck sales declined nearly 9% year over year.
- Diesel fuel prices fell for five consecutive weeks through May 12, down 16 cents over that period and down 37 cents per gallon compared to last year.
- While capacity tightens, spot rates remain at or below historical averages and freight brokers report little difficulty matching loads with carriers.
Unemployment and interest rates remain steady
The United States added 177,000 jobs in April, below March’s numbers but above expectations of 135,000 jobs. Unemployment remained at 4.2%. The labor force participation rate increased to 62.6% from 62.4%.
The Federal Reserve (the Fed) held interest rates steady, noting volatile trade activity and keeping borrowing costs between 4.25%–4.5%. The Fed will meet again Tuesday–Wednesday, June 17–18.
The Consumer Price Index narrowly rose 0.2% in April with the annual rate dropping to 2.3% from last month’s 2.4%, the lowest since February 2021. The Producer Price Index fell 0.5% in April and the year-over-year change was 2.4%, the first drop in five years. The decline suggests companies are absorbing some of the impact from higher tariffs rather than trickling it down to consumers.
Lumber demand drops to start spring construction season
Lumber prices have dipped 1.25% since the beginning of 2025, driven by oversupply from winter restock and a drop in demand. Construction of new single-family homes dropped 14.2% and pushed inventories to a nearly eight-month supply level.
Why it matters: The 90-day tariff rollback eased immediate buying pressure. Canadian mills are holding back some supply due to concerns of higher U.S. anti-dumping duties, but overall, domestic demand remains low during the start of what normally is prime home selling and building season.
State of commodities:
- The International Copper Study Group now forecasts a sizable copper surplus — nearly 500,000 metric tons — through 2025 and 2026 due to a shift in U.S. trade uncertainty.
- Copper prices stumbled 5.5% after data showed the United States economy shrank and export orders in China fell to close out April.
- Ukraine and the United States signed a critical mineral deal that will grant the U.S. preferential access to Ukrainian minerals.
- The Organization of the Petroleum Exporting Countries (OPEC) agreed to increase output by 411,000 barrels per day in June, following a similar boost in May. The two-month rise will bring more than 800,000 barrels of surplus into the market, above experts’ original forecasts.