US retailers demand Chinese suppliers cover shipping costs

Qatar Tribune

09-06-2025

Agencies
US retail giants are demanding that their Chinese suppliers split or even bear the full cost of shipping goods across the Pacific, as freight rates skyrocket amid the disruption caused by the trade war, sources at Chinese export firms told the Post.
The move is the latest sign of the intense pressure America's biggest retailers are putting on Chinese factories to absorb more of the additional costs created by the trade war, with the companies facing calls at home to 'eat the tariffs'.
Until recently, it was standard practice for major American retailers to pay the full cost of shipping goods from China to the United States, with the companies able to leverage long-standing relationships with global shipping firms to keep costs low, sources from exporters in eastern China's Zhejiang province said.
But that is now changing. Factories in Zhejiang supplying the US' 'dominant' hypermarket chains are now having to foot part – or, in some cases, all – of the cost of transporting goods to America, according to the sources.
Stage Group, a leading garment maker from Zhejiang, has been paying the logistics costs on 60 per cent of its US-bound shipments since the end of May, a sales representative from the company said.
Shipping costs are not the only area where China's factories are being squeezed. Earlier this month, sources told the Post that US retailers were pushing their Chinese suppliers to shoulder up to 66 per cent of the costs of US tariffs, whereas previously those fees were paid by the American buyers.
The dispute over shipping costs appears to have been triggered by the tariff truce agreed by Beijing and Washington in mid-May, which saw both sides agree to drastically scale back levies on each other's goods for 90 days.
The temporary deal sparked a surge in demand for container freight, as US retailers rushed to front-load as many shipments from China as possible before the truce expires, sending shipping costs spiralling.
Some ocean freight forwarding companies are reportedly charging US$6,000 to US$7,000 per container on US west and east coast routes for the rest of June, almost double what they were quoting in late May.
Last month, the cost of shipping a container from the Ningbo-Zhoushan Port in Zhejiang to US west coast destinations like Long Beach, California, had already risen to US$3,000, sources told the Post.
That was triple the rate in April, when sky-high US and Chinese tariffs had caused many retailers to halt shipments.For China's exporters, the concern is that many firms – especially smaller suppliers – will struggle to cope with the extra shipping costs. Factories in traditional industries like apparel were already running on thin margins before the trade war, and rising costs are now pushing companies to the limit.
Freight costs are expected to remain far above their normal levels for several more weeks, with shipping firms still working to bring back online the capacity they slashed in April, a manager with the Zhejiang branch of Chinese logistics firm Sinotrans said.
Some exporters are still unable to secure container bookings due to the spike in demand, while others are seeing their goods get stuck at ports overwhelmed by the sudden surge in shipments, local media outlet Zhejiang Daily reported on Saturday.
Shipping giant Maersk cut 20 per cent of its US-bound capacity in April, and it is currently working to bulk up its fleet once again, senior executives from the company told a recent maritime forum in Zhejiang.
Ningbo-Zhoushan Port – the world's third-largest container port – is taking urgent steps to deal with a deluge of export orders, which has been made even more extreme by the tariff truce coinciding with the traditional peak season for US retailers stocking up on goods for the holiday season.
Ships plying US routes will be given priority in docking and loading, and the port is also looking at ways to shorten docking times to increase capacity.
The port is also finding more room at its piers to store US-bound goods to help businesses save on logistics costs, said Teng Yahui, a senior executive with the Zhejiang Seaport Group, the port's operator.
Ports in Zhejiang should get operations for US exports back to normal by mid-June, according to Teng.
Ningbo's exports to the US in April slumped more than 25 per cent year on year, after rising 12.6 per cent year on year during the first three months of 2025. But shipments have recovered since May, which should help to stabilise the local economy, according to local officials.