2025 Q1 Freight: China’s Export Edge

In Q1 2025, trans-Pacific freight rates plunged and port operations normalized. Yet warehouse backlogs, trucking shortages, and last-mile disruptions persist—delivery remains slow and costly.

Mainline Prices Drop, But Delivery Bottlenecks Remain

 Spot rates on US West Coast routes fell nearly 50% YoY, driven by pre-Lunar New Year stockpiling. However, warehousing and ground transport remain constrained—FBA check-in times in some regions still exceed 10 days.

North American Logistics Undergoing Structural Shift

 The entire logistics chain is being reshaped. Labor shortages, land scarcity, and persistent trucking issues continue to hinder fulfillment, even as East Coast ports recover slowly.

Mexico Rises, Vietnam Falters

 Tariff pressures drive Chinese manufacturers to Mexico, especially in electronics and assembly sectors. Meanwhile, Vietnam’s exports dropped 11% YoY due to new 46% tariffs from the Trump administration.

Strategic Implications:

• Chinese factories: Focus on integrating into Mexico's upstream supply chain.

• North American brands: Localize quality control; Mexico is not China.

• Logistics firms: Invest in northern Mexico’s warehousing and last-mile capabilities.

China's Export Edge Remains

 Despite relocation trends, China’s Q1 exports grew 0.8%, especially in high-end and fast-turn products, where its engineering strength and supply chain speed remain unmatched.

US Chain Retrenchment Signals Risk

 Over 23,000 jobs were cut across logistics and manufacturing. Firms like Chewy, HelloFresh, and Trinity Rail have scaled back. The shift affects even heavy-asset industries, signaling softening demand.

The Next Advantage: Resilient Supply Chains

 Future competitiveness hinges not on cost alone, but on building flexible, diversified, and responsive supply chain networks.