Tariffs Lead To Mayhem For Transpacific Ocean Freight
Ocean freight bookings from Asia to the United States are in heavy decline, which will come as little surprise to most following the recent bout of US/China tariff increases.
Carriers have been witnessing a monumental reduction in bookings and hundreds of cancellations on advanced bookings. At least three transpacific service loops have been cancelled indefinitely and numerous blanked sailings are being introduced with little notice.
China’s US-bound container bookings are reportedly down between 30% and 60% depending on who you believe, although a report published on CNBC’s website suggests that US imports from China fell by 64% between weeks 14 and 15.
Exports from other Asian countries are understood to have fallen by between 10% and 20%, but some Asian exporters will likely look to beat Trump’s 90-day postponement of higher tariffs during the next few weeks.
Chinese exports may also see a small recovery from the temporary exemption of certain consumer electronics, which are currently being imported at the 10% baseline duty rate until further notice.
Carriers are facing a chaotic situation while the US taxes Chinese imports by 145% and China taxes American imports by 125%.
Unless one or both parties blink, shipping lines will be faced with the unenviable task of significantly cutting or realigning the huge capacity they have covering the world’s largest trading route.
Exactly where that capacity will go is debatable and could have a significant impact on Asia/European and global services.
In the meantime, we very much hope that common-sense prevails. The trade teams at Atlantic Pacific are monitoring developments very closely.
