UWL Freight Market Update | Navigating New Trade Norms

Your Monthly Logistics Round Up - Timely insights for navigating today's freight markets.

Global trade is potentially entering a new era, shaped by evolving tariff policies, sourcing shifts, and rising geopolitical complexity.  As importers rework their strategies and look for stability, agility and clarity are more critical than ever. This month’s update explores the most impactful developments shaping today’s freight landscape and what they mean for your supply chain.

Industry Watch

📜 U.S. and U.K. Enact Bilateral Trade Deal

The two countries have formally implemented a trade agreement that sets new tariff quotas across several key sectors. Highlights include a 10% tariff on up to 100,000 U.K. car imports annually, with a steep 25% rate beyond that cap, and reduced tariffs on U.K. auto parts. The deal also exempts certain aerospace products from reciprocal tariffs and establishes new quotas on beef, steel, and aluminum. Talks on pharmaceuticals remain ongoing. Read more →

🍁 Canada and U.S. Target Trade Deal

Canada has rescinded its proposed digital services tax in a bid to keep trade negotiations with the U.S. on track. The move comes after Prime Minister Mark Carney and President Trump announced plans at the G7 summit to pursue a new economic and security pact within 30 days. While major sticking points—like U.S. tariffs on steel, autos, and aluminum—remain, both sides have shown renewed willingness to negotiate. Canadian officials maintain that retaliatory measures are still on the table if talks break down. Read more →

🛒 Retail Sales Dip 0.9% in May After Tariff-Driven Surge

U.S. retail sales fell sharply in May, down 0.9% overall and 0.3% excluding autos, as consumers pulled back after a March spending spike aimed at beating incoming tariffs. Auto sales saw the steepest decline following a rush to buy ahead of Trump’s 25% import duty on cars and parts. Despite the slowdown, online, clothing, and furniture retailers posted modest gains. Analysts note that with inflation easing and job growth holding, consumer spending could rebound later this summer. Read more →

📦 Transpacific Trade: Tariff Update

Trump Announces Framework for New China Trade Deal

President Trump declared that a new trade deal has been reached with China, aimed at stabilizing the ongoing tariff disputes. While details remain limited, the announcement brings temporary relief to markets, which had been rattled by fluctuating tariffs and retaliatory measures. The logistics sector is watching closely for implementation specifics.

Rare Earths and Strategic Trade Leverage Now in the Spotlight

A key component of the emerging China deal appears to involve rare earth materials, critical inputs for high-performance electronics, electric vehicles, and defense systems. Trump emphasized that China would continue to supply rare earth magnets “up front,” suggesting that rare earths are no longer merely commodities, but central to trade diplomacy.

This development comes amid heightened tension over China’s rare earth export restrictions, which have impacted global manufacturing. In recent months, export controls on magnet-grade materials like neodymium and dysprosium have driven up prices by over 200%, triggering production delays across the auto and electronics sectors. U.S. and EU manufacturers, already reeling from chip shortages, are now facing a new layer of supply chain risk.

China currently dominates over 90% of the global rare earth refining market and has shown a growing willingness to weaponize its position. Recent enforcement crackdowns and tightened customs controls signal Beijing's commitment to using rare earths as a strategic counterweight to Western tariffs and tech restrictions.

What to Watch Next

• Implementation details of the new trade framework, especially around tariff rollbacks and rare earth commitments.

• Supply chain responses from major Western manufacturers, who are racing to diversify away from Chinese inputs.

• Regulatory moves from the EU and U.S., both of which are exploring legislation and subsidies to bolster domestic rare earth production.

While markets may welcome the promise of a deal, the underlying geopolitics remain unresolved. The rare earth squeeze has turned into a key pressure point in the broader trade landscape, with lasting implications for sourcing strategies, industrial policy, and global logistics planning.

Vietnam Trade & Resilience Amid Tariff Pressures

As the July 9 deadline approaches to reinstate “reciprocal” tariffs, the U.S. has agreed to a revised trade framework with Vietnam. The previous threat of a hefty 46% tariff has now been lowered to a flat 20% tariff on all Vietnamese imports, while a 40% levy will target goods believed to be trans‑shipped through Vietnam from other countries, primarily China .

In exchange, Vietnam has pledged to open its domestic market to U.S. exports on a tariff‑free basis. This two‑tiered tariff structure reflects a strategic U.S. push to preserve trade ties with Vietnam while deterring transshipment of Chinese goods.

Vietnam officially welcomed the pact as a major breakthrough. Its leadership emphasized how the deal could expand business opportunities, bolster trade confidence, and foster deeper bilateral cooperation

Cambodia Trade Talks Amid Tariff Threats

Cambodia is negotiating with the U.S. after Washington imposed a steep 49% tariff on key exports, mainly garments and footwear, which account for nearly 38% of its $10 billion in annual shipments to America. Cambodian officials, including Deputy PM Sun Chanthol and Commerce Minister Cham Nimul, have engaged in “frank and constructive” discussions with U.S. trade representatives, and a second round of talks took place in early June. To sweeten the deal, Cambodia has offered to reduce its own tariffs on 19 categories of U.S. imports—from as high as 35% down to 5%—in exchange for relief.

With the country’s garment sector providing employment to hundreds of thousands, the stakes are high: Moody’s has already downgraded Cambodia’s outlook to negative, warning of a “serious risk” to growth and jobs. The government is emphasizing its willingness to cooperate, urging calm while seeking a breakthrough before U.S. tariffs bite deeper.

Freight Market Trends

Ocean Freight Snapshot

After five weeks of gains, transpacific spot rates have reversed course. Drewry’s World Container Index fell 9% for the second straight week, now at $2,983 per 40ft container, driven by softening U.S.-bound demand. While recent tariff reprieves fueled a temporary import surge, the momentum appears short-lived.

• Rates from Shanghai to New York dropped 13% last week to $5,703, though still 56% higher than in early May.

• Shanghai to Los Angeles fell even more sharply, down 20%, but remains up 38% over the same period.

Carriers are monitoring these swings closely, and while some lanes into Europe saw modest gains, forecasts suggest weakening fundamentals into 2H25. Future volatility will depend on pending tariff rulings and potential new penalties on Chinese-flagged ships.

Far East – US West Coast Spot Rate Trend | Source: Drewry

🌍 Geopolitics: Middle East Tensions Spark New Fears for Global Container Shipping

Geopolitical tensions continue to cast a shadow over global supply chains following Israeli and US airstrikes on Iranian military and nuclear targets. While commercial vessels have not been attacked, the UK Maritime Trade Operations has warned of a “rapid escalation” risk, particularly in the Strait of Hormuz, a narrow passage that sees roughly 20% of global oil and a significant share of container traffic.

Iran’s retaliatory strikes on Israel and the ongoing detention of the MSC Aries, a ship with Israeli ties, have already rattled the industry. The region’s fragile security environment has many recalling how just a handful of incidents in the Red Sea in late 2023 led major carriers to abandon routes en masse. According to Vespucci Maritime CEO Lars Jensen, “Hormuz could follow the same pattern.”

In response to the US and Israeli attacks, Iran’s parliament has approved a measure to close the Strait of Hormuz, a chokepoint for roughly 20% of global oil and a major share of container traffic. While the measure remains symbolic unless enacted by Iran’s top leadership, global markets and shipping stakeholders are bracing for possible disruptions. Analysts warn Iran could attempt to mine the narrow shipping lanes or deploy small vessel attacks to threaten transit—tactics that would likely draw immediate US military reprisal.

Peter Sand, Chief Analyst at Xeneta, noted that rerouted traffic would strain Indian ports and send container rates upward. “We’d likely see rising congestion, oil price hikes, and new security surcharges from carriers,” he warned. Moreover, the instability could further delay a return to the Red Sea corridor, where Iran-backed Houthi forces remain active.

Data from the Joint Maritime Information Centre shows reported ship transits plunged ahead of the fragile ceasefire reached on June 23. Eastbound traffic fell from an average ~114/day to just 49 vessels, with westbound down to 42—its lowest level since the onset of conflict.

Infrastructure & Intermodal Snapshot

🏗️U.S. Port Infrastructure and Security Bill Clears House

The Maritime Supply Chain Security Act (H.R. 2390) has passed the U.S. House of Representatives, aiming to modernize port infrastructure and reduce national security risks linked to Chinese-made equipment. Introduced by Rep. David Rouzer of North Carolina, the bill permits federal Port Infrastructure Development Program funds to be used for replacing ship-to-shore cranes and related software produced by Chinese firms.

📉 Truckers Score Short‑Term Relief as EV Mandate Paused in California

The Trump administration has revoked California’s waivers for zero-emission vehicle mandates under the Clean Air Act, including the rule requiring 75% of Class 8 drayage trucks to be zero-emission by 2035 and stricter NOₓ standards for heavy-duty trucks. The American Trucking Associations and Owner‑Operator Independent Drivers Association cheered the move, citing high EV costs and a lack of charging infrastructure, especially critical at ports.

📦 Final-Mile Pressure Builds as Peak Pull-Forward Begins

Retailers are fast-tracking peak season shipments before the August tariff reprieve expiry, leading to unexpected final-mile volume spikes in inland hubs like Memphis, Kansas City, and Columbus. This shift is requiring tighter coordination between drayage carriers and long-haul providers, with growing value on flexible, hybrid-capable trucking networks.

🔧 Parts Delays Return for Key Equipment

Parts shortages are creeping back into the conversation. Carriers are reporting extended lead times for brake components, emissions systems, and DEF sensors. As more tariff action looms over auto parts, fleets are being urged to plan ahead and secure inventory now to avoid downtime during the Q3 volume rush.

Sun Chief Express Welcomes New Vessel Partner, Emirates Shipping Line

As demand for fast and reliable service from Southeast Asia continues to grow, UWL is proud to welcome Emirates Shipping Line (ESL) as the new vessel-operating partner for our Sun Chief Express service. ESL brings expanded capacity and long-term stability to one of the most trusted lanes in the Transpacific trade.

The Sun Chief Express remains a premium, direct service connecting Vietnam and Southeast Asia to the U.S. West Coast—with no transshipment, no splitting, and no nonsense. With ESL onboard, we’re building on the foundation of schedule integrity, service reliability, and transparent customer service that set Sun Chief apart.

Looking to improve reliability and simplify your routing decisions? Here’s what you get with Sun Chief Express:

• Direct Southeast Asia Access: Weekly sailings from Ho Chi Minh City (SPITC) to Seattle, supported by ESL’s stable deployment strategy.

• Strong U.S. Inland Reach: Integrated transload and rail options into major hubs including Chicago, Kansas City, Memphis, and Columbus.

• No Blank Sailings: Capacity and service consistency maintained week after week—ideal for your Q3 and Q4 planning.

• In-House Drayage, Coast to Coast: With over 65 tractors and 200+ chassis, our in-network fleet powers the final mile on both U.S. coasts.

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