Trade war escalates, spot freight rates continue to fall between Asia and the United States

- May 23, 2019-

Last week, rates on asia-west routes fell 7.1% from the previous week to $1,340 per FEU, while those on asia-east routes fell 4.2% to $2,597 per FEU.

On May 10, the United States raised tariffs from 10 percent to 25 percent on $200 billion of Chinese imports.Affected by this, Asia - us route market uncertainty began to emerge.

The Shanghai container shipping price index (SCFI), released by the Shanghai shipping exchange, shows that freight rates for trans-pacific routes have fallen for three consecutive weeks (April 29-may 19).

In the past week alone, rates on asia-west routes fell 7.1% from the previous week to $1,340 per FEU, while rates on asia-east routes fell 4.2% to $2,597 per FEU.

According to the latest announcement from the United States trade representative (USTR), the United States will also seek public comment on a 25 percent tariff on about $300 billion in imports from China, and hold a hearing on June 17.

If the trade war between China and the us continues to escalate, the shipping market will come under further pressure.

Platts said the new round of tariffs had led to lower margins for us importers and less willingness to place orders."The transpacific market is going to be very impacted in the next few weeks as the shipping companies try to maintain market share."

 

Last week, the National Retail Federation, which represents us importers, said retailers were considering their options.

Since manufacturing and logistics levels in other countries are much lower than in China, it is almost impossible to move goods purchases to other countries in the short term.In the long term, U.S. retailers may seek to diversify their supply chains while moving goods from other countries or regions.

Consumers will also have to foot the bill for higher tariffs, which raise costs for retailers.Recently, some American enterprises also expressed their views on this issue.

Wal-mart imports 26% of its goods from China, some of them household goods.It argues that higher tariffs mean higher prices for some goods for consumers.

Nike, adidas and other shoe manufacturers have called on Mr Trump to reconsider his tariff policy, warning it would be "catastrophic".

Us traders are flush with stocks after importers opted to buy ahead of planned tariffs at the start of the year.

At present, the practice of early shipment is no longer feasible, and American importers need to purchase goods normally, which may relieve the pressure on carriers to some extent.