Shippers will not be entirely convinced

Figure of the week

The number of containers that fell off a Zim-chartered vessel at berth in the port of Long Beach into the sea. Port authorities and Zim said they were investigating the causes of the incident, which involved a collision with a clean air barge and did not lead to any injuries.

Quote of the week

“Risk of rising anti-Americanism as a consequence of the Trump tariffs and governmental policies with consumer preferences possibly shifting away from U.S. brands.” In a note in its UK accounts, Levi Strauss Co warns that anti-US sentiment abroad could affect the sales of the US goods. Brands such as Tesla have already seen falling US sales, which some analysts attribute to Elon Musk’s past ties to the Trump administration.

S hippers will not be entirely convinced

Carriers are lining up to promise there will be no surcharges as new US port fees come into force in the coming weeks, but shippers will not be entirely convinced. The USTR fees have the potential to create yet another source of delays and rate rises for US shippers when they come into force on October 14. Shippers’ organizations tried to overturn the fees but succeeded only in having them watered down. Shippers will inevitably be worried that carriers’ apparent determination not to pass the fees on to customers may waver as the costs bite. Chinese carriers and those operating China-built ships will be affected by the new fees. MSC, CMA CGM, and Hapag-Lloyd are among the carriers to stress they are not considering a surcharge. And on the face of it, the individual carriers should be able to manage capacity to avoid calling at US ports with China-built vessels. The problem could be that as a member of the Ocean Alliance, which includes Chinese shipping lines, Cosco and OOCL, it may find scheduling is not entirely in its control. HSBC has calculated that the fees could knock $2.1 billion of profits for the two Chinese carriers in 2026. Xeneta chief analyst Peter Sand is among those who believe that the fees could prove to be a source of delays and rate rises as carriers adjust. The good news, according to Sand, is that as carriers remove China-built ships from US services, they will probably not cut extra capacity or blank extra sailings. But already, rates, which had been steadily falling in recent weeks, have shown a slight uptick week on week. Analysts have attributed this to anticipation of the effect of the port fees. The major indexes showed rate rises from Asia to the east coast of about 7.2% week on week and a heftier surge to the west coast of 15.5%. Shippers then might not entirely believe the reassuring words emanating from carriers. They will be conscious that carriers would be unlikely to damage their market position by publicly considering surcharges at this time . Prudent shippers will keep a close eye on the situation and plan for the worst.

Air cargo rates are going nowhere fast

Export volumes appear to be shrugging off any potential anti-US sentiment and are showing steady growth year on year. But air cargo rates are going nowhere fast. Brands such as Levi Strauss & Co. have warned of the dangers of consumers worldwide shifting away from US products due to the Trump effect. Yet while some exporters such as Tesla have noticed sustained falls in sales, US exports saw year-on-year growth in June. The main drivers included Italy, which saw 42% growth; the Netherlands, which saw a 12.5% rise; and Switzerland, which saw 128% growth. Meanwhile, outbound rates from the US seem to be falling. The TAC Index described them as “mostly lower across the board”. The most likely explanation for this counterintuitive trend is the sustained capacity on routes outbound from the US. Analysts are expecting the abolition of the de minimis tariff threshold to start affecting e-commerce volumes on the trans-Atlantic westbound and with it, air freight rates. Xeneta Chief Airfreight Officer Niall van de Wouw said, “The starting point for closing the de minimis threshold was mainly politically motivated against the big Chinese e-commerce platforms, but the widening of this legislation is leveling the playing field again for all e-commerce shipments entering the US. I would now expect to see lower e-commerce volumes moving by air from Europe to the US. If anything, observers suggest this will now benefit China because of its lower production cost base.” According to ROTATE, US to Asia-Pacific freighter capacity rose by 4% over the past month. For now, shippers have their cake and are eating it too, at least to a degree .

Peak season shows every sign of having been short-lived

Chinese imports have faced three consecutive weeks of heavy decline, according to data from Vizion. The normal rush of freight ahead of China’s Golden Week in October is showing little sign of materializing. According to Vizion, product segments hardest hit include furniture, toys and sporting equipment, electrical devices and components, machinery, and plastics. Toy and sporting equipment volumes currently stand at an average of 20% less compared to last year’s so-called peak season, Vizion reported. Nevertheless, some products are bucking the trend, most notably raw materials such as rubber and organic chemicals. It’s all a far cry from July, when the Port of Los Angeles reported a record number of containers. Since then, tariffs have started to bite, and inventory levels within the US are widely considered to be well-stocked. In fact, North America is currently the only region to have experienced negative freight container volume growth since the US-China trade war began, according to Sea-Intelligence . Those falling volumes have pushed ocean carriers to take new measures to prop up rates. At this stage, that consists of 35 blank sailings listed for October. Many carriers are planning to attempt to push through a $1,000 per 40-foot container GRI on September 15. “The fact that we saw freight capacity go up in August of all months suggests there isn’t much freight left to move,” said Zachary Rogers, associate professor of supply chain management at Colorado State University. Shippers are unlikely to be too worried that the planned GRIs will stick .

🤔 Did you know ?

A coalition of nearly 200 shipping companies is putting itself at odds with the Trump administration as it calls for the world’s largest maritime nations to adopt regulations that include the first-ever global fee on greenhouse gases. The Getting to Zero Coalition position is opposed by the US government, which has threatened to retaliate against nations supporting it.

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