Tariffs – Trump Tariffs

Donald Trump recently announced a plan to put tariffs on imports from Mexico and Canada to US of 25% because of excessive border crossings of undocumented persons and high level of smuggling of illegal drugs or their key precursors.  Expectations are for high level meetings with each country to come to agreeable terms to greatly diminish or end these intrusions.    Trump’s inauguration is on January 20^th.  Any official actions by the new president will happen afterward.   We expect high level meetings, formal or informal will be taking place over the next few weeks with hopes of agreeable resolutions between the three countries.

Trump also announced the addition of 10% duty on all China imports directly because of the illegal drug and precursors smuggling from China to the US or through Mexico & Canada. 

This could all be resolved before the inauguration but if not, there is no specific date of action yet announced. 

We will continue to update the newsletters regularly.

Ocean Outlook - Frontloading inventory is expected:   

Many shippers are expected to ship inventories in larger amounts and early to beat a number of risks in January.   

Risk 1 - US East Coast/Gulf possible strike starting on or after January 15.   

If a strike is called on that date, you will need to have your shipments arrived before then and already off the port.  That means your shipments will need to be sailed early enough to have arrived.   China – need 42+ days normally.  From Europe – 2 weeks. 

Risk 2 - New US tariffs could be enacted on or soon after presidential inauguration, January 20

Especially imports from China via and now Mexico & Canada.   To beat the tariff, shipments need to be cleared before the new tariff date.  That will be on or maybe a few days prior to ETA of the container to the port you are clearing the shipment.  

Risk 3 - Chinese New Year/Lunar New Year is January 29.

Shipping from North Asia countries, especially out of China is expected to be heavy up until the start of CNY.   Remember during CNY, factories in China shut down for maybe 2 weeks.   Shipping is at a minimum and carriers tend to blank many sailings. Generally, we need to ship early.  Other Asia ports are affected also by vacations during this period but to a much lesser extent.   Shipping lines though, by blanking sailings originating from China, can impact your other sailing expectations. 

Risk 4 - Red Sea issues continue

Sailings around Africa between Asia and Middle East with Europe and Mediterranean and the Americas East Coast ports is still happening as the Suez Canal routing still impacted by the attacks from Yemen Houthis.  Expectations are that this will continue   well into 2015.  

Reliability Update

Ocean container shipping schedule reliability is still at a dismal 50% performance.  This is well below the standards pre-Covid that were usually in the 75% range.    Transit times in many schedules are also shorter transits before the Covid period. 

Much of the lack of improvements are blamed on the Suez/Red Sea events of the last year however even shipping lanes not affected by the Red Sea have longer transit times than in past years.  Perhaps vessels are slowing down even more to cut emissions but shippers’ expectations are still for reasonable reliability levels.  

We will continue to track these issues and provide future updates.  Next update will be adding information on current carrier pricing and capacity.