Newsletter [Oct 25 - Oct 31]
Good Morning
A note from our CEO, Richard Roman Jr
The freight market continues to demonstrate surprising resilience as we approach November.
Despite additional vessel capacity returning following China’s Golden Week, ocean freight rates have continued moving higher across several major trade lanes. Carriers are maintaining pricing through General Rate Increases (GRIs), selective blank sailings, and continued capacity management.
At the same time, we are beginning to see some encouraging developments in international trade negotiations. The United States and Canada are reportedly making progress toward an agreement that could reduce certain tariffs on steel and automobiles, while USTR continues addressing trade and labor compliance matters involving Mexico and Europe.
For importers, the next several weeks will be important as carriers adjust capacity for November and governments continue negotiating trade policies that could materially affect landed costs heading into 2027.
The Roundup
What moved the world this week
Customs & Trade Policy Update
U.S.–Canada Negotiations Show Signs of Progress
Following months of escalating tariffs and retaliatory measures, the United States and Canada are reportedly working toward an agreement that could ease certain trade restrictions.
Recent negotiations have focused primarily on Section 232 tariffs affecting Canadian steel and automobiles.
While no agreement has been finalized, discussions have intensified, and officials from both countries have expressed cautious optimism about reaching a resolution.
This is particularly important for manufacturers operating integrated North American supply chains, where steel, automotive components, and finished vehicles frequently cross borders during production.
For importers, the key takeaway is that existing tariffs remain applicable until formal changes are announced. However, an agreement could provide meaningful relief to certain industries.
USTR Continues Strengthening USMCA Enforcement
The United States and Mexico announced developments this week under the USMCA Rapid Response Labor Mechanism.
On October 23, USTR announced the successful resolution of a labor compliance matter involving an automotive and aerospace component manufacturer in Sonora, Mexico.
The United States and Mexico also announced a remediation plan involving a mining operation in Mexico.
These developments reinforce the administration’s continued focus on labor compliance and supply-chain accountability under USMCA.
For companies sourcing from Mexico, maintaining accurate supplier information and understanding potential labor-related trade restrictions are becoming increasingly important.
U.S.–EU Trade Relationship Faces Renewed Scrutiny
On October 26, USTR issued a statement regarding the status of the U.S.–EU trade détente following a significant European Investment Bank loan to Airbus.
The development highlights continuing tensions surrounding government support, industrial competition, and trade policy between the United States and Europe.
While no new tariffs were announced as part of the statement, the issue reinforces that trade negotiations remain sensitive even among major U.S. trading partners.
For importers sourcing from Europe, we recommend monitoring future USTR announcements before making assumptions about long-term tariff treatment.
Supply Chain & Logistics News
Freight Rates Continue Rising Despite Returning Capacity
Ocean freight rates moved higher again this past week, marking another consecutive increase in major East–West freight benchmarks.
According to Drewry, the latest increases were supported by carrier GRIs, higher Freight All Kinds (FAK) rates, and continued capacity management.
Interestingly, the market is not tightening uniformly.
On the Trans-Pacific, carriers have announced fewer immediate blank sailings, indicating additional effective capacity is returning. However, resilient U.S. import demand continues supporting freight conditions.
Meanwhile, carriers are increasing blank sailings on Asia–Europe services to support pricing.
Our View
We continue to believe the freight market is being influenced as much by carrier strategy as by underlying demand.
Additional capacity is returning, but carriers have demonstrated their willingness to adjust sailings when necessary to defend pricing.
For importers, this means market conditions may vary significantly depending on origin, destination, carrier, and service.
Blank Sailings Remain an Important Market Factor
Carriers continue strategically managing capacity as we approach November.
Drewry currently projects 56 cancelled sailings across major East–West trades over the next five weeks, representing approximately 8% of scheduled services.
The cancellations are concentrated primarily on Asia–Europe and Mediterranean services, followed by the eastbound Trans-Pacific.
Although approximately 92% of scheduled services are expected to operate, the cancellations remain significant because they can affect available space, routing options, and schedule reliability.
For importers, this reinforces the importance of booking early and maintaining flexibility between carriers.
Asian Port Congestion Shows Improvement
There was also some encouraging operational news this week.
Recent data from Drewry indicates that vessel waiting times at Shanghai have declined significantly compared with September.
Improving port operations should help vessels maintain schedules and allow equipment to circulate more efficiently.
However, improvements at individual ports do not necessarily translate into immediate relief across every trade lane.
Equipment positioning, carrier allocations, and downstream congestion can continue affecting shipments even after origin port conditions improve.
The Forecast
Trends, goals, and what’s on the radar at JR Global
As we move toward November, our team believes the freight market is entering another important period of adjustment.
The continued success of carrier GRIs has been notable. Earlier this year, we anticipated that returning capacity would create more downward pressure on freight rates. While additional space has become available on certain services, carriers have continued maintaining stronger pricing than expected.
The question now is whether this can continue through the remainder of the year.
We expect carriers to remain disciplined with capacity as they prepare for the 2027 contract season. However, improving port congestion and additional vessel availability could eventually create greater pricing competition if demand begins moderating.
On the customs side, we are encouraged by signs of progress in U.S.–Canada negotiations, but we remain cautious. Until formal agreements and CBP implementation guidance are issued, importers should continue calculating landed costs using currently applicable duties.
Looking ahead, we are also beginning to prepare for the next Chinese New Year shipping cycle. Importers with production and shipping requirements in early 2027 should begin reviewing forecasts and coordinating with suppliers before the next pre-holiday rush develops.
Our recommendation remains to plan early, maintain flexibility, and evaluate both freight and customs exposure together.
The Shortcut
Smart tips for smart shippers
Ocean freight rates continue moving higher across major trade lanes.
Carriers are successfully maintaining pricing through GRIs and capacity management.
Approximately 56 blank sailings are projected across major East–West trades over the next five weeks.
Trans-Pacific capacity is gradually improving, while Asia–Europe carriers are reducing sailings.
Shanghai port congestion has improved compared with September.
The United States and Canada are discussing potential tariff relief for steel and automobiles.
USTR continues strengthening labor compliance enforcement under USMCA.
U.S.–EU trade tensions remain an area to monitor.
Importers should begin reviewing early 2027 shipping forecasts ahead of Chinese New Year.
The Playlist
What the JR team is listening to this week in the office
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