Carriers plan to dig in deep to protect softening rates

Figure of the week

$10.2 billion

The amount due to Walmart in tariff refunds is after the Supreme Court ruled many of the Trump administration’s tariffs illegal. Small shippers face the same essential process as the likes of Walmart when it comes to obtaining a refund.

Quote of the week

“[Importers] are pessimistic that the government is going to make this easy. They’re anticipating that the government is going to make it as difficult as possible to get their money back.” Trade attorney Matthew Seligman of Grayhawk Law expresses shippers’ fears that the IEEPA tariff refund process will be considerably harder than CBP publicity suggests.

Carriers plan to dig in deep to protect softening rates

Ocean carriers are planning an aggressive program of blank sailings on the Trans-Pacific trade to attempt to defend current spot rates . Drewry reported that carriers had scheduled nine blank sailings on the Trans-Pacific for next week. Carriers are planning to “defend current price floors” rather than allowing a slide back to previous lows. As if that was not enough for shippers to contend with, they are also planning a series of peak season surcharges for the beginning of May. However, underlying demand remains moderate, and any hopes carriers might have had that the Iran conflict could introduce a demand boom, as was seen during Covid, are coming to nothing. Over the last week, spot rates on the Trans-Pacific have fallen by about 3%. The big question is whether this is entirely down to soft demand and excess capacity, or whether oil prices might also be feeding in. As noted in our second report, oil prices fell last week due to the ceasefire between the US, Israel and Iran. That might all change this week: President Donald Trump has declared a unilateral extension to the previous ceasefire. But it remains an open question whether talks will continue. If the conflict resumes, expect rising oil prices feeding into bunker rates and significant volatility. The only real good news for shippers this week is that Drewry believes freight rates will remain more stable in the weeks before the early May PSSs .

US-Iran ceasefire doubts feed into jet fuel fears

Air freight shippers could face higher fuel surcharges after uncertainty around US-Iran ceasefire talks caused oil prices - and therefore jet fuel prices - to rise . Many airlines are currently altering fuel surcharges on a weekly basis. However, the price of jet fuel, which has doubled since the start of the Iran war, had begun to stabilize due to the current ceasefire. That changed earlier this week. US Vice President JD Vance called off a trip to Pakistan for peace talks after it became unclear whether Iranian negotiators would even attend. The uncertainty around negotiations sent the price of a barrel of Brent crude up from $95 to around $100. It later settled back at $98.48 after President Donald Trump said he would unilaterally extend the ceasefire. Meanwhile, rates increased by 10% last week as demand rose ahead of the Labor Day holidays on Trans-Pacific flights. On the Trans-Atlantic, the start of the summer season means more capacity is arriving. However, increasing fuel prices in Europe, one of the worst affected regions, are impacting overall rates. Shippers can expect fuel surcharges to remain dependent on wider oil prices, which in turn will depend on whether peace in the Middle East appears more likely .

C.A.P.E fear as shippers await CBP refunds

Many US shippers will be facing a nail-biting wait as CBP’s tariff refund portal goes online . With more than $160 billion due in refunds following February’s Supreme Court ruling, there is much at stake as shippers apply for the funds. On the face of it, CBP’s portal appears to have made the refund process significantly easier than some importers had feared. The portal, known as C.A.P.E., means that all importers who paid the tariffs that were ruled illegal will have to make the same declaration to receive a refund. The devil, however, is in the detail. Refund claims will have to undergo multiple validations, and it is not yet entirely clear what supporting documentation will be acceptable or how flexible CBP will be in assessing the claims. “There’s a fair degree of pessimism in the importing community about whether this is really going to work the way it’s described,” said Stefan Reisinger, a partner at law firm Norton Rose Fulbright. One possibility is that the Trump administration may yet try to challenge refunds before they are paid. President Donald Trump has already said he would “remember” businesses that did not seek refunds. Trump has stopped short of threatening firms that are seeking refunds - for now. Another option that could potentially slow the process would be if CBP submits applications to intense scrutiny. Either way, given that the process is effectively the same for organizations of all sizes, it is likely to favor larger firms. With some seeking sums that in amount to billions, larger companies are likely to find it much easier to devote time, expertise and resources to seeking refunds. Other firms are worried about potential legal challenges from customers. Some lawyers have indicated that firms which expressly passed through tariff cost increases to customers would be particularly vulnerable to such claims . 🎬 LIVE WEBINAR How Importers Can Recover Overpaid Duties? CBP’s CAPE system is live . In 30 minutes, Valeria Carbajal walks you through IEEPA refunds & our Q2 freight forecasts. Tue, April 28

11:30 AM ET · 30 min Save my seat → 🤔 Did you know ?

India has demanded that the US call off its Section 301 investigation into excess manufacturing capacity and forced labor imports. The US has launched a series of Section 301 probes across major trading partners that are widely believed to be a mere formality before introducing a range of new tariffs on goods from these countries. New Delhi stopped short of threatening retaliation and said it was prepared to engage in trade discussions if the investigations were halted.

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