While the latest tariffs were deferred, the impact to date on small US businesses, both in profitability and sourcing behavior has been significant.
China-US West Coast prices (FBX01 Daily) increased slightly to $1,321/FEU with a handful of carriers increasing prices mid-month. There may be another small spike next week as forwarders catch up after Golden Week and belatedly implement mid-month price rises. For now, prices remain flat, 7% behind 2017 prices, and well behind (43%) last year’s high prices.
China-US East Coast prices (FBX02 Daily) dropped 5% since last week to $2,587/FEU. That makes for a mixed bag when compared to recent years – down 25% on 2018 (when prices were high), up 31% on 2017 (when prices on this lane were crashing) and even up 7% on 2016 (when the Hanjin crisis cranked prices up).
“It’s hard to see how Friday’s indefinite deferral of the 25% tariff increase will have much impact on China - US shipping prices. As President Trump proved in May, deferrals can be axed at very short notice, making for a mercurial trade environment whereby importers have to assume the worst in order to avoid massive losses. Nevertheless, a smattering of optimistic carriers tested the waters with mid-month price increases.
Deferrals or not, importers are stocking up for holiday shopping with the NRF expecting a holiday sales windfall this year, and November’s imports are forecasted to be 9% up on last year, creating an environment more conducive for significant ocean freight price increases early next month.”
- Eytan Buchman, CMO, Freightos
