Positive signs surrounded trade negotiations taking place this week in Madrid between China and the United States, led by reported progress on a deal for social media platform TikTok, that could ultimately benefit trans-Pacific shipping.
More good news was rate improvement for containers heading from China to the U.S. West Coast, which increased 7% to $2,309 per forty foot equivalent unit (FEU) as of Sept. 16, according to consultant Freightos (NASDAQ: CRGO). That was also 34% higher than at the end of August.
China-East Coast prices edged up 4% to $3,368 per FEU, having risen by 24% in September.
Freightos Research Chief Judah Levine credited ocean lines’ general rate increases imposed earlier this month, buttressed by blanked sailings and higher shipper demand approaching China’s Golden Week holiday.
“[Rates] may have been helped by some volume increase due to the 30% China tariff extension [through November], Levine wrote in a note.
But Levine cautioned that while the tariff pause has so far failed to fuel a surge in volumes since, it may have slowed the rate of declining demand.
Also, second-half imports may have been weakened by frontloading ahead of tariff deadlines in April, and again for July and August.
The National Retail Federation estimates that second-half shipments will be lower by 10% from the same period in 2024. October imports are forecast to be 13% lower, and 20% down in November and December.
September imports are running 16% ahead of the retail group’s projections made at the beginning of August, indicating some positive impact from the ongoing 30% U.S. tariffs on China.
While there is some skepticism that punitive U.S. port charges on China-linked shipping set to take effect Oct. 14 will survive the trade talks, carriers continue to shift tonnage to minimize their exposure.
Ocean Network Express (ONE) is redeploying 10 Chinese-built ships in U.S. service as the Premier Alliance divides its trans-Atlantic service into an Asia-Mediterranean loop and a Middle East-U.S. service.
Find more articles by Stuart Chirls here.
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