U.S.-China tensions shake up maritime trade as flatbed capacity tightens
Both global and domestic freight markets are feeling the effects of trade negotiations and shifting demand, putting pressure on transportation costs.
Ocean container shipping costs continue to soften amid U.S.-China tensions, with rates falling sharply and imports from China dropping nearly 13% in March. Ongoing trade negotiations are expected to create demand volatility — particularly with China, the U.S.’s largest maritime trading partner.
- The average shipping rate across all global freight lanes has declined more than 11% in the past 30 days and is down 75% from the 2021 peak.
- Despite the drop in rates, March marked the third-highest volume of ocean imports on record.
- Disruptions in major routes like the Suez Canal are also adding to global trade pressures.
U.S. trucking capacity is also tightening, especially with flatbeds. Available flatbed capacity is down 40% from the prior month and 120% from the prior year. The transport of commodities and finished goods, like steel and lumber, are a few factors behind rising flatbed volumes.
- Flatbed spot rates have increased for nine consecutive weeks, reaching their highest levels since 2023. Spot rates remain relatively weak by historical standards but are expected to rise between 2–7% this year, particularly for flatbeds.
- Diesel fuel prices have declined for the third consecutive month, with costs per gallon now 40 cents less than this time last year.
Job growth exceeds forecast as the Fed holds rates
The U.S. labor market added 228,000 jobs in March, exceeding last month’s numbers and the 135,000 forecasted. Unemployment rose slightly to 4.2%, higher than February’s 4.1%. The labor force participation rate increased by 0.1 percentage point this month, rising from 62.4% to 62.5%.
The Federal Reserve (the Fed) paused interest rate cuts with the new administration’s roll out of a slew of policy changes. Fed Chair Jerome Powell referred to this time as a “wait and see” period due to elevated uncertainty. The Fed will meet again Tuesday–Wednesday, May 6–7.
By the numbers: The Consumer Price Index was 2.4% on an annual basis, the lowest since September 2024. On a monthly basis, prices fell 0.1% in March, which was the first fall since May 2020. The Producer Price Index fell 0.4% in March and the year-over-year change rose to 2.7%.
Raw material prices react to ongoing global headwinds
In the first quarter of 2025, commodity prices saw both increases and declines across key materials. Shifting trade policies and broader market dynamics added a layer of uncertainty, prompting manufacturers, businesses and consumers, to navigate volatility in both pricing and availability of commodities and finished goods. The effects varied: tariffs and supply constraints pushed some prices up, while the lack of economic clarity and weaker demand drove others down.
- Copper prices were on a high as suppliers rushed to move the metal into the U.S. after President Trump ordered an investigation into copper imports. Then, in early April, the metal fell nearly 60 cents per pound as markets reacted to escalated tariff announcements between the U.S. and China.
- Aluminum imports were exempted from U.S. reciprocal tariffs since they were already subject to a 25% tariff in March. Canadian energy resources, including critical minerals like aluminum, face a reduced 10% tariff on goods if they don’t meet USMCA requirements.
- Steel pipe suppliers are reporting solid stock levels and lead times of about 2–3 weeks, as domestic competition heats up. Tariffs on aluminum and steel have left domestic manufacturers scrambling to source materials. About $178 billion worth of imported steel and aluminum products from last year are now subject to 25% tariffs.
- In the first quarter, resin demand weakened due to seasonal trends, broader economic uncertainty, and the impact of the U.S. dollar on exports and global pricing benchmarks. Vendors are reporting good supply and lead times of about 2–3 weeks heading into construction season.
- The prospect of higher costs on U.S. imports due to the 10% baseline tariffs has slowed home construction and renovation activity, leading to weaker lumber demand. Although lumber prices have risen around 7% this year, analysts expect a decline as economic uncertainty and reduced Canadian imports weigh on demand.
- Crude oil prices have declined to their lowest levels since April 2021, driven by escalating trade tensions and increased oil production by the Organization of the Petroleum Exporting Countries and its allies (OPEC+), who plan to boost output by 411,000 barrels per day starting in May 2025. Analysts suggest the move is aimed at maintaining market share amid global disruption.
By the numbers: In the first quarter, copper wire prices surged with 11 price increases. Aluminum wire prices rose three times, and steel pipe saw five price increases. Resin prices were 6% lower in March, and from March 2025 to March 2024, prices declined by about 45%. Lumber prices have increased around 7%, but prices are expected to decline as Canada’s exports decline.
Read the Fact Sheet for more on tariffs and a product category breakdown.