Latin America Rates Soften as Capacity Outpaces Demand

The Asia-Latin America market is experiencing a notable shift in the second half of July as freight rates soften across all major trade lanes. Mexico, West Coast South America and East Coast South America have all recorded substantial declines, with carriers adjusting pricing downward to stimulate cargo intake amid weakening demand. Space availability has improved considerably on most services, though Central America and Caribbean routes continue to experience relatively tighter conditions. Weather-related disruptions are adding schedule uncertainty, with typhoon impacts affecting vessel departure punctuality and transit times across the region.

To help you better understand the current market dynamics and support your sales activities at origin, please find below our latest observations and outlook for the second half of July.

Rate Direction and Market Pricing Trend

• Freight rates have softened substantially across all major Latin America trade lanes during the second half of July. Mexico and West Coast South America rates have declined substantially, while Panama and Caribbean routes are down moderately, and East Coast South America has recorded the steepest correction.
• Several carriers are offering special rates to specific gateways including Lazaro Cardenas, Manzanillo and Santos, Brazil, adding further pricing pressure to an already soft market. These targeted offers reflect carriers’ efforts to improve vessel utilization on services where cargo intake has fallen short of expectations.
• The underlying market tone remains weak, with rate erosion driven primarily by declining demand rather than surcharge-driven increases. While fuel and emergency-related surcharges such as FAF, BAF, EIS and CGS should still be monitored carrier by carrier, the dominant trend is downward pricing adjustment as carriers compete for available cargo.
• Previous extra-loader vessels have achieved only approximately 80% cargo intake, demonstrating that demand has weakened considerably from earlier peak levels. This soft utilization pattern is preventing carriers from maintaining pricing discipline despite meaningful capacity reductions across the network.
• For partners handling larger-volume shipments or project cargo, we encourage early engagement with our pricing team. Market conditions remain highly negotiable, and tailored solutions are available depending on shipment profile, carrier selection and routing requirements.

Capacity Outlook and Space Situation

• Space remains generally open on most Latin America services, with the notable exception of Central America and Caribbean routes, where the situation is relatively tighter. This divergence reflects stronger U.S.-related cargo flows supporting Caribbean demand while other sub-regions experience softer booking momentum.
• Week 30 capacity reductions on West Coast South America services total approximately 30,000 TEU, representing a meaningful withdrawal of available space. However, declining market demand has prevented these cuts from supporting a rate rebound, as carriers continue to compete actively for cargo to fill remaining capacity.
• Several network adjustments are taking effect during Week 30:
  • ZIM’s ZCP service vessel is arriving but not accepting Mexico cargo.
  • Hapag-Lloyd TPM, HMM NW3, MSC AZTEC and ONE ALX3 services are implementing a blank sailing affecting approximately 11,000 TEU.
  • Hapag-Lloyd AN1, HMM NW1, MSC INCA and ONE ALX1 services are implementing a blank sailing affecting approximately 13,000 TEU.
  • CMA CGM M2X service is implementing a blank sailing affecting approximately 7,000 TEU.
  • COSCO WSA8 and OOCL TLP8 services are implementing a blank sailing affecting approximately 5,000 TEU.
  • Maersk AC2 service departure is delayed by approximately four days.
• On East Coast South America services, Hapag-Lloyd AS2, MSC IPANEMA and ONE SX1 are implementing a blank sailing affecting approximately 12,000 TEU during Week 30. Although ONE and MSC have withdrawn some larger vessels from the rotation, overall capacity discipline has not been sufficient to offset the decline in cargo demand.
• Looking ahead to September, ZIM will launch its new Falcon Service connecting Asia and the East Coast of South America. The service will operate exclusively by ZIM with the following rotation: Shanghai, Ningbo, Hong Kong, Yantian, Rio de Janeiro, Santos, Paranagua, Navegantes, Montevideo, Buenos Aires and return to Shanghai. The maiden voyage is scheduled for September 13 from Shanghai, and ZIM’s existing ASE service will continue operating until the new service commences.

Operational and Regulatory Developments Affecting Trade

• Typhoon impacts are causing severe disruptions to vessel schedules, affecting both departure punctuality and transit times. Recent vessel departure reliability has been very poor, with serious delays in sailing creating increased schedule uncertainty across the network. These weather-related disruptions may lead to cargo rollovers or delayed availability at destination.
• Buenaventura, Colombia has experienced an average vessel waiting time of approximately two days over the past week, adding further operational complexity for shipments routed through this gateway. Partners should factor in additional buffer time when planning cargo delivery schedules to Colombian destinations.
• Brazil has implemented a significant tariff change for the automotive sector effective July 1. Complete vehicle imports are now subject to a 35% import tariff, while companies importing vehicles in knocked-down or parts form for local assembly can still enjoy temporary tax incentives. From January 1, 2027, parts imports will also move to a unified 35% tariff level. This policy shift may affect automotive-related cargo flows into Brazil and could gradually reshape sourcing and shipping patterns for the sector.
• The combination of weak demand, special spot offers to specific ports, and meaningful blank sailings has not been sufficient to prevent continued rate reductions. Market fundamentals suggest that carriers will need to see a material improvement in cargo intake before pricing can stabilize, making flexibility and early communication essential for securing the most competitive solutions during this adjustment phase.

RS Logistics will continue monitoring carrier pricing strategies, capacity deployment adjustments and regulatory developments across the Latin America trade lane closely. Our teams across China and Southeast Asia remain available to support booking planning, routing evaluation and space coordination for upcoming shipments. We will continue sharing timely updates as market conditions evolve throughout the remainder of July.

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