US Freight Sector's Tariff Truce Opportunity: Timing the Surge and Navigating Post-August Risks

The 90-day tariff truce between the U.S. and China, effective May 14, 2025, has reignited transpacific freight demand, driving a 50% volume surge and rate rebounds of 19% in key routes. For investors, this presents a fleeting opportunity to capitalize on short-term rate volatility—provided they prioritize freight logistics firms with flexible capacity, route diversification, and exposure to non-US-China trade lanes. Yet, the clock is ticking: renewed tariffs after August could trigger a collapse in rates if overcapacity re-emerges. Here’s how to play the rebound—and survive the fallout.

The Tariff Truce’s Immediate Impact: Rates and Volumes Surge

The truce’s reduction of U.S. tariffs on Chinese goods from 145% to 30% has unleashed pent-up demand ahead of the back-to-school season. Transpacific spot rates for Asia-to-U.S. East Coast routes have jumped to $4,350/FEU, while volumes—previously down 35% in April—are surging as businesses frontload shipments to lock in lower costs. The Drewry World Container Index (WCI) now sits at $2,091/FEU, up 47% from pre-pandemic levels, signaling a sustained premium over 2019 norms.

This rebound is no flash in the pan. Carriers like CMA CGM and Maersk have capitalized on the surge by reducing capacity (via blank sailings and smaller vessels), stabilizing rates even as demand outpaces supply. But the window is narrow: if tariffs revert post-August, rates could drop sharply as demand collapses again.

Strategic Plays: Why CMA CGM and Maersk Are Positioned to Win

Not all carriers are created equal. Investors must focus on firms with geopolitical hedging, cost discipline, and diversified trade exposure to non-US-China routes.

1. CMA CGM: Infrastructure Fortresses and Low-Carbon Flexibility

• Route Diversification: CMA CGM’s $20B investment in LNG and methanol-powered vessels (153 ships by 2029) and strategic port acquisitions—like a 48% stake in Brazil’s Santos Brasil—enable rerouting around geopolitical hotspots (e.g., the Red Sea).
• Terminal Network: Its 60 terminals across 30 countries, including the Nador West Med hub in Morocco and Khalifa Terminal in UAE, provide alternative gateways to avoid U.S.-China bottlenecks.
• Profitability: Despite April’s volume slump, CMA CGM’s EBITDA margin rose to 30.8% in 2024, outperforming peers by leveraging alliance synergies (Ocean Alliance until 2032) and route optimization.

2. Maersk: Nearshoring and Cost Control Mastery

• New Route Networks: Maersk’s TA10 direct service to the U.S. East Coast from Turkey and expanded feeder routes in Southeast Asia position it to capture rerouted cargo from China to Vietnam, Mexico, and India.
• Cost Discipline: A Peak Season Surcharge (PSS) on high-demand routes and vessel resizing (not cancellations) ensure margins stay intact even as demand peaks.
• Non-China Exposure: Maersk’s focus on Canada (despite space constraints) and Middle Eastern imports aligns with businesses’ nearshoring trends, reducing reliance on U.S.-China trade.

The August Crossroads: Why the Tariff Truce is a Double-Edged Sword

While the truce fuels short-term gains, the clock is ticking. If tariffs revert post-August:
1. Overcapacity Risks: Reduced demand could lead to a flood of empty containers and rates plummeting to 30% below 2024 peaks.
2. Terminal Congestion: A second wave of back-to-school cargo may collide with August’s deadline, creating bottlenecks at ports like Charleston and Savannah.

To mitigate these risks, investors must:
- Lock in gains by August: Exit or reduce exposure to pure-play transpacific carriers lacking diversified trade exposure.
- Focus on firms with flexible capacity: CMA CGM’s LNG fleet and Maersk’s dynamic vessel resizing ensure they can scale down without crippling costs.

Final Call: Act Now, But Stay Agile

The tariff truce is a short-lived catalyst for freight stocks. Investors who act swiftly—buying CMA CGM and Maersk now—can profit from the rate rebound. But discipline is key: set exit triggers for August 14 (the tariff deadline) and monitor capacity adjustments.

Bottom Line: The freight sector’s truce-driven rally is a tactical opportunity—but only for those who pair optimism with an exit plan. Selectivity is survival.