Shipping demand set to explode as firms rush to exploit US-China tariff pause
Transpacific shipping routes are set to witness a dramatic uptick in container traffic over the coming weeks, as businesses rush to front-load shipments to take advantage of a temporary reduction in US and Chinese tariffs, analysts said.
The
90-day truce announced by China and the United States on Monday is expected to trigger an immediate surge in demand for container shipping, with some analysts warning the increase in shipments could be so large that it creates bottlenecks at American ports.
The de-escalation of the trade war came earlier than many expected, container shipping intelligence firm Linerlytica said in a note on Monday, which is 'setting the stage for a surge in transpacific cargo volumes in the next three months'.
The wave of demand will be even more intense due to the fact that many companies already have significant backlogs of goods ready to ship, with US importers adopting a 'wait-and-see' strategy in recent weeks as they watched for any potential move to roll back tariffs, said Lars Jensen, the founder of Vespucci Maritime, in an online post.
Following trade talks in Switzerland over the weekend, the US
has agreed to reduce its recently imposed tariffs on Chinese imports from 145 per cent to 30 per cent, with 91 percentage points of those tariffs scrapped and 24 percentage points suspended for a period of 90 days.
China, in turn, has agreed to cut its retaliatory tariffs on US imports from 125 per cent to 10 per cent. The deal will come into effect on Wednesday.
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