Sea Freight Rates Soar by 50%! Why Is Space “Hard to Secure” on China-Mexico Routes?

Since 2024, the maritime shipping market for China-Mexico routes has witnessed a “price surge storm”—in the Baltic Dry Index (BDI), freight rates from China to major Mexican ports (Manzanillo Port, Veracruz Port) have continued to climb. By the first quarter of 2025, container shipping rates had surged by 50% year-on-year, with 40-foot container rates exceeding $4,000. During peak periods, there have even been instances where “space cannot be secured even with price premiums.” For export enterprises in industries such as mobile phones, home appliances, and auto parts that rely on these routes, “hard-to-secure shipping space” has become the norm, not only increasing logistics costs but also disrupting supply chain rhythms. What exactly has caused such tightness in the maritime shipping market for China-Mexico routes? And what new changes in the global supply chain does this “shipping space scramble” reflect? This article will analyze the core reasons for the “hard-to-secure space” issue from four dimensions—demand, capacity, costs, and policies—and provide response strategies for enterprises.

I. Explosive Demand: Booming Mexican Market Drives “Surge in Export Orders”

The sharp growth in shipping demand for China-Mexico routes is the fundamental reason behind rising freight rates and tight space. In recent years, as Mexico’s status in the global industrial chain has elevated and China-Mexico trade cooperation has deepened, China’s export orders to Mexico have experienced a “surge,” particularly in categories such as mobile phones, auto parts, and home appliances—becoming the core drivers of shipping demand.

1. Mexico Emerges as a “Hotspot” for Industrial Relocation, Sparking Surge in Intermediate Goods Imports

Against the backdrop of global supply chain restructuring, Mexico has become a key destination for the relocation of industries such as automobiles and electronics, leveraging its advantages of proximity to the U.S. market and relatively low labor costs. Automotive giants like Tesla and Ford have established factories in Mexico, while electronics companies such as Apple and Samsung have also moved part of their production capacity there—driving up demand for imported intermediate goods from China. The auto parts (e.g., batteries, chips) and mobile phone assembly materials (e.g., screens, casings) required by these enterprises are mostly sourced from China, primarily transported by sea.

Taking the automotive industry as an example, Mexico’s auto production grew by 18% year-on-year in 2024, with 60% of the automotive batteries needed by local factories coming from Chinese companies like CATL and BYD. To meet production needs, Mexican automotive enterprises significantly increased import orders from China. In the fourth quarter of 2024 alone, the volume of auto parts shipped by sea from China to Mexico rose by 45% year-on-year. A large number of containers flocked to Manzanillo Port (Mexico’s main port for auto parts imports), directly pushing the port’s space utilization rate to over 95%.

2. Rise of Cross-Border E-Commerce: “No Off-Season” for Consumer Goods Shipping Demand

The traditional maritime shipping market follows a pattern of “high demand in peak seasons (second half of the year, e.g., Black Friday, Christmas) and low demand in off-seasons (first half of the year).” However, the rise of cross-border e-commerce in Mexico in recent years has broken this traditional cycle, resulting in “no off-season” for shipping demand of consumer goods on China-Mexico routes.

According to data from the Mexican E-Commerce Association, Mexico’s cross-border e-commerce transaction volume exceeded $40 billion in 2024, with 70% of consumer goods sourced from China, covering categories such as clothing, home appliances, and household items. Platforms like Amazon Mexico and Mercado Libre adopt a “pre-stocking” strategy to meet stable annual consumer demand—even during the off-season in the first half of the year, they procure large quantities of Chinese goods and ship them to Mexican overseas warehouses by sea. From January to February 2025 (the traditional off-season), the shipping volume of cross-border e-commerce goods on China-Mexico routes increased by 30% year-on-year, with home appliance shipments growing by 52%—further exacerbating the tightness of shipping space.

3. USMCA Drives Demand for “Transshipment Trade”

The United States-Mexico-Canada Agreement (USMCA), which took effect in 2020, stipulates that automobiles, electronics, and other products produced in North America can enjoy duty-free treatment if they meet certain rules of origin. This policy has promoted the “China-Mexico-U.S.” transshipment trade model: Chinese enterprises first ship goods to Mexico, conduct simple processing (e.g., labeling, assembly) locally, and then export them to the U.S. to enjoy tariff preferences.

This transshipment trade has significantly boosted shipping demand from China to Mexico. Taking mobile phones as an example, the number of mobile phones exported from China to Mexico via transshipment trade reached 12 million units in 2024, a year-on-year increase of 60%. Most of these mobile phones were shipped to Mexican bonded zones by sea and then distributed to the U.S. market. In 2024 alone, transshipment trade drove a 35% increase in shipping volume on China-Mexico routes, becoming a key driver of demand growth for these routes.

II. Capacity Shortage: Supply Growth Lags Behind Demand, Key Resources “Insufficient for All”

In sharp contrast to the explosive growth in demand, the supply of shipping capacity on China-Mexico routes has grown slowly, and even contracted in some periods. Issues such as insufficient ship numbers, outdated port infrastructure, and uneven space allocation have collectively led to the “hard-to-secure space” situation.

1. “Conservative” Capacity Deployment by Shipping Companies, New Vessels Fail to Meet Demand

Major global shipping companies (e.g., Maersk, COSCO Shipping, Hapag-Lloyd) typically plan capacity based on long-term market forecasts when deploying resources. However, the growth rate of demand on China-Mexico routes has far exceeded expectations, resulting in a severe lag in capacity deployment. In 2024, the demand for container shipping on China-Mexico routes increased by 40% year-on-year, while the new capacity added by shipping companies was only 15%, creating a 25% capacity gap.

There are two main reasons for the “conservative” capacity deployment by shipping companies: first, the long ship construction cycle (usually 2-3 years) makes it difficult to quickly increase capacity in the short term; second, shipping companies have concerns about the long-term stability of the Mexican market, worrying that the demand growth is only a “short-term boom,” and thus are reluctant to invest heavily in new vessels. For example, Maersk only added 2 new 10,000 TEU (Twenty-foot Equivalent Unit) vessels to China-Mexico routes in 2024, far below the 40% demand growth rate of the routes—further worsening the tightness of shipping space.

2. Outdated Port Infrastructure: Goods “Stuck at Terminals”

The outdated infrastructure and low loading/unloading efficiency of major Mexican ports have become a “bottleneck” restricting capacity turnover, leading to longer ship stays at ports, lower space turnover rates, and indirectly exacerbating the “hard-to-secure space” issue.

Taking Manzanillo Port, Mexico’s busiest port, as an example, the port’s container terminal has only 5 berths, and most of the loading/unloading equipment is 20-year-old outdated machinery, with an hourly loading/unloading efficiency of only 25 TEUs—far lower than that of Shanghai Port in China (60 TEUs per hour). In 2024, Manzanillo Port experienced frequent congestion due to equipment failures and labor shortages. The average ship stay at the port increased from 7 days to 12 days, and some ships even had to wait 2 weeks to berth and unload.

Port congestion has significantly reduced ship turnover efficiency—ships that could originally make 3 round trips between China and Mexico per month can now only make 2 trips due to longer port stays, reducing the actual effective capacity by 33%. At the same time, congestion has caused a large number of containers to pile up at ports, unable to be transported in a timely manner, further occupying limited space resources.

3. Space Allocation Tilted Toward “Large Shippers,” Small and Medium-Sized Shippers “Unable to Secure Space”

In the context of tight space resources, shipping companies usually prioritize allocating space to long-term cooperative large shippers (e.g., Amazon, Walmart, large automotive enterprises), leaving small and medium-sized shippers facing the dilemma of “being unable to secure space.”

Long-term space booking agreements signed between large shippers and shipping companies usually lock in 50%-60% of the route’s space. For example, in 2024, Amazon signed an agreement with COSCO Shipping to secure 30% of the space on China-Mexico routes for transporting consumer goods on its platform; Tesla secured 15% of the space for transporting auto parts. This leaves small and medium-sized shippers competing for only 40%-50% of the remaining space. During peak demand seasons, they even need to pay a 30%-50% premium to secure space. Some small and medium-sized shippers have to leave their goods in warehouses and delay delivery due to inability to secure space.

III. Rising Costs: Multiple Factors Push Up Operating Costs, Freight Rates “Follow Suit”

In addition to the imbalance between supply and demand, the significant increase in operating costs is another important reason for the surge in sea freight rates on China-Mexico routes. Costs such as fuel, labor, and port fees have been rising, and shipping companies have had to increase freight rates to maintain profits, ultimately passing these costs on to shippers.

1. Volatile Fuel Prices: Soaring Ship Operating Costs

Fuel costs are a core component of shipping companies’ operating costs, accounting for 30%-40% of total costs. Since 2024, affected by global geopolitical conflicts and imbalances in crude oil supply and demand, the price of marine fuel (IFO 380) has risen from \(600 per ton to \)900 per ton, an increase of 50%.

The rise in fuel prices has directly pushed up ship operating costs. Taking a 10,000 TEU container ship as an example, a one-way voyage from Shanghai, China to Manzanillo Port, Mexico takes approximately 30 days and consumes 1,500 tons of fuel. The fuel cost has increased from \(900,000 to \)1.35 million, an increase of $450,000 for a one-way trip. To cover the cost increase, shipping companies have had to raise freight rates—fuel price increases alone have driven up the 40-foot container rate on China-Mexico routes by 20%.

2. Rising Labor Costs: Shortage of Port and Ship Personnel

Labor costs in maritime-related industries have been rising continuously in both China and Mexico, and the industry is facing a labor shortage, further pushing up operating costs.

In China, the salaries of port workers and ship crew have been increasing year by year. In 2024, the average monthly salary of port workers increased by 15% year-on-year, and the monthly salary of crew members increased by 20%. At the same time, due to the high intensity of work and long periods away from home, the industry is facing a “recruitment difficulty” problem. Some ships have to delay their departure due to insufficient crew, affecting space supply.

In Mexico, port worker strikes occur frequently. In 2024, port workers at Manzanillo Port and Veracruz Port went on strike due to salary disputes, with each strike lasting 7-10 days. This caused port loading/unloading operations to stop and ships to be unable to depart on time. To cope with strike risks, shipping companies have had to increase security costs and temporarily hire replacement workers, further increasing operating costs. These costs are ultimately passed on to shippers through higher freight rates.

3. “Diverse” Port Fees and Surcharges: Increased Comprehensive Costs

Various fees at Mexican ports (e.g., Terminal Handling Charges (THC), Demurrage, Detention) have also been rising in recent years, and there are a wide variety of surcharges, further increasing the comprehensive costs for shippers.

Taking Manzanillo Port as an example, in 2024, the port’s THC for 40-foot containers increased from \(800 to \)1,000, a 25% increase; Demurrage fees rose from \(50 per container per day to \)70, and Detention fees increased from \(40 per container per day to \)60. In addition, shipping companies have added new surcharges such as Peak Season Surcharge (PSS) and Port Congestion Surcharge (PCS). The total surcharges for a 40-foot container range from \(500 to \)800, accounting for 20%-30% of the total freight rate.

The increase in these fees has significantly raised the comprehensive logistics costs for shippers, and shipping companies have further amplified the magnitude of freight rate increases by raising base rates.

IV. Policies and External Environment: Trade Policy Changes and Geopolitical Risks Intensify Market Volatility

In addition to supply-demand and cost factors, external environmental factors such as changes in trade policies in Mexico and globally, as well as geopolitical risks, have also had a significant impact on the maritime shipping market for China-Mexico routes, exacerbating space tightness and freight rate volatility.

1. Tightened Mexican Customs Policies: Delayed Cargo Clearance

In recent years, to crack down on smuggling and standardize import order, Mexico has continuously strengthened customs supervision and introduced a series of strict clearance policies, such as the “Electronic Product Import Traceability System” and “Pre-Declaration System.” While these policies are conducive to market standardization, they have also prolonged cargo clearance time and increased container stay time at ports, indirectly affecting space turnover.

For example, the “Pre-Declaration System” implemented in 2024 requires that detailed declaration documents be submitted to Mexican Customs 72 hours before goods arrive at the port, and the documents must pass AI system review by Customs. If the review fails, clearance cannot be completed. This policy has resulted in approximately 30% of goods being required to supplement documents due to declaration issues, extending clearance time from 3 days to 7 days. Some goods even require more than 10 days to complete clearance. The prolonged stay of containers at ports has prevented ships from unloading and loading goods in a timely manner, reducing space turnover rates and further exacerbating the “hard-to-secure space” issue.

2. Changes in U.S.-Mexico Border Policies: Increased Uncertainty in Transshipment Trade

Changes in U.S.-Mexico border policies have also affected transshipment trade from China to Mexico, indirectly impacting the stability of shipping demand. In 2024, U.S. Customs strengthened origin verification for goods imported from Mexico, requiring more detailed processing certification documents. Some goods that failed to meet the requirements were denied entry, leading to the accumulation of goods in Mexican bonded zones.

To cope with U.S. Customs verification, Chinese enterprises have had to adjust transshipment trade processes, increasing the stay time of goods in Mexico. Some goods even need to be transported back to China, causing short-term fluctuations in shipping demand. At the same time, policy uncertainty has made some enterprises adopt a wait-and-see attitude toward transshipment trade, reluctant to place large orders—further exacerbating the imbalance between supply and demand in the shipping market. Shipping companies are hesitant to add new capacity due to concerns about declining demand, while actual demand continues to grow, ultimately leading to the persistence of tight space.

3. Geopolitical Risks: Ship Route Adjustments and Rising Insurance Costs

Global geopolitical conflicts (e.g., tensions in the Middle East) have also had an indirect impact on the maritime shipping market for China-Mexico routes. To avoid risks, some shipping companies have adjusted their ship routes to bypass high-risk sea areas, leading to longer voyages, increased fuel consumption, and further reduction in effective capacity.

For example, in the second half of 2024, tensions in the Red Sea region in the Middle East led some shipping companies (e.g., Hapag-Lloyd) to suspend routes from the Suez Canal to the Americas and instead choose to detour around the Cape of Good Hope in Africa. This extended the voyage from China to Mexico from 30 days to 45 days, reducing ship turnover rates by 33% and decreasing effective capacity. At the same time, geopolitical risks have also led to an increase in ship insurance costs. In 2024, the war risk insurance premium for China-Mexico routes increased by 100% year-on-year, further increasing the operating costs of shipping companies and driving up freight rates.

V. Response Strategies: How Can Enterprises and Industries Break the “Hard-to-Secure Space” Dilemma?

Faced with the “soaring freight rates and hard-to-secure space” situation on China-Mexico routes, shippers, shipping companies, governments, and industry associations need to collaborate and take targeted measures to ease market tightness and reduce supply chain risks.

1. Shippers: Optimize Logistics Solutions, Reduce Dependence on a Single Route

For shippers, the following measures can be taken to cope with maritime shipping difficulties:

• Plan in Advance and Lock in Space: Sign long-term space booking agreements with shipping companies, or book space 2-3 months in advance through freight forwarders (e.g., Sinotrans, JC Trans) to avoid “being unable to secure space” during peak seasons. For example, a mobile phone export enterprise signed a long-term agreement with COSCO Shipping in 2024, securing