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Business Times
11 hours ago
- Business
- Business Times
Can US ports handle a freight spike or will they be overwhelmed?
ARE Los Angeles and Long Beach heading for another port congestion crisis? Since the United States put tariffs on hold for a 90-day trade war truce with China on May 14, the market has expected a shipping surge driven by Chinese exports. Ocean carriers have re-instated suspended services, restarted vessels lying idle, and introduced new routes – revitalising transpacific lanes. But how much capacity has actually returned to the US-bound trade? Estimates vary. According to maritime consultancy eeSea, total capacity from Asia to North America will reach 2.4 million twenty-foot equivalent units (TEUs) in June – 400,000 TEUs more than May. That figure is projected to climb further in July to 2.8 million TEUs. The majority of this added capacity targets the US West Coast, particularly the ports of Los Angeles and Long Beach. Data provider Sea-Intelligence reports similar trends. Its latest weekly update shows a 17 per cent year-on-year rise in Asia-US West Coast capacity in June, with a projected 19 per cent jump in July. Meanwhile, East Coast capacity is growing more modestly – up only 7 per cent in June but expected to match the West Coast's 19 per cent rise in July. These figures are based on carriers' existing schedules, which remain subject to change. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The big question is whether Los Angeles and Long Beach can handle this influx. Will the port congestion seen in the pandemic era re-appear? Preliminary forecasts indicate that container volumes at both ports will begin rising in the second week of June, topping 100,000 TEUs a week. Volumes will continue climbing in the third week. While fourth-week data is not yet available, estimates suggest traffic will remain elevated. Many extra sailings are scheduled to arrive in late June and early July, suggesting persistently high throughput at least into mid-July. Historically, both ports handled their highest Asian import volumes in 2021 during the Covid-19 pandemic – about 10 million TEUs for the year. The Port of Los Angeles alone processed a record 520,000 TEUs in May 2021, while the Port of Long Beach reached its single-month peak of 400,000 TEUs the same month. Will the same influx appear again this time? Industry opinion is divided. Senior executives at leading carriers and terminals suggest the tariff deferral may not trigger a pandemic-style shipping boom. While June volumes are likely to exceed May's, early expectations may have overshot. Much of the inventory that had been sitting in warehouses shipped out quickly after the May 14 tariff suspension. And even if buyers place new orders, lead times mean many shipments will not depart until late June or July. Moreover, despite the suspension of a 125 per cent reciprocal tariff, the 30 per cent levy added this year – on top of 2018's Section 301 duties – means US-China trade has not returned to normal. The truce may offer temporary relief, but it is unlikely to generate a prolonged surge. Freight rates on transpacific routes have spiked in recent weeks. But does that signal true demand strength? A key indicator is the balance between cargo booked under negotiated contract (NAC) rates versus freight-all-kinds spot rates. At present, many freight forwarders are still able to secure lower-priced NAC slots — suggesting excess capacity remains. While sentiment may push prices upward temporarily, ultimate rate direction hinges on ship utilisation. If vessels sail full, rates will hold firm. If not, the rally will fade. So, will there be port congestion? A sudden and sustained spike in volume could strain operations. However, if elevated cargo volumes last only two to three weeks, the ports can manage. If imports climb more than 20 per cent above normal and stay high through July, congestion risks increase sharply. The bottom line is that Los Angeles and Long Beach are entering a high-alert phase. If disruption comes, it will probably begin to show in late July. CAIXIN GLOBAL Zhang Huafeng is the chief operating officer of Duke Shipping Agency
Kuwait Times
11-05-2025
- Business
- Kuwait Times
China exports beat forecasts ahead of US tariff talks
BEIJING: Chinese exports rose last month despite the trade war raging with the United States, official data showed Friday ahead of talks between the world's top two economies towards easing the standoff. Experts said that the forecast-smashing 8.1-percent rise indicated that Beijing was re-routing trade to Southeast Asia to mitigate US tariffs of up to 145 percent on Chinese imports imposed by President Donald Trump. Trade between the world's two largest economies has slumped since Trump imposed the tariffs — some cumulative duties are 245 percent — and China responded with levies of 125 percent and other measures. The year-on-year increase in exports of 8.1 percent in April was much higher than the 2.0 percent forecast by analysts polled by Bloomberg last month. The data from the Chinese customs bureau showed exports to Thailand, Indonesia and Vietnam surged by double digits, in what one analyst called a 'structural repositioning' of trade. 'The global supply chain is being rerouted in real time,' Stephen Innes of SPI Asset Management wrote in a note. 'Vietnam looks set to become China's offshore escape hatch for US-facing goods,' he said. 'The manufacturing juggernaut is diverting flow wherever the tariff pain isn't.' Month-on-month exports to the United States plunged 17.6 percent. Analysts at ANZ Research said the data revealed 'it is difficult to exclude China from the global supply chain in the short term, considering China's role in manufacturing.' 'The implied supply chain realignment as well as the expected outcome of Asia-US trade talks suggests no imminent collapse in China exports,' they added. Global markets have been on a rollercoaster since Trump began his tariff offensive aimed according to the White House at bringing back manufacturing to the United States. While Trump has suspended for 90 days many of the most painful levies, those on China have remained in place. Markets have been lifted by optimism over meetings set to take place in Geneva over the weekend between US and Chinese officials — the first talks between the superpowers since Trump's trade offensive began. Washington has said it hopes the sitdown will allow for a 'de-escalation', while Beijing has vowed it will stand its ground and defend its interests. — AFP Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, also attributed the forecast-beating exports to 'transshipment through other countries.' But he also cited potential 'trade contracts that were signed before the tariffs were announced.' 'I expect trade data will weaken in the next few months.' Imports were also being closely watched as a key gauge of consumer demand in China, which has remained sluggish. They also beat expectations, dropping 0.2 percent, compared with the 6.0-percent slide analysts had estimated. Chinese policymakers this week eased key monetary policy tools in a bid to ramp up domestic activity. Those included cuts to a key interest rate and moves to lower the amount banks must hold in reserve in a bid to boost lending. A persistent crisis in the Chinese property sector—once a key driver of growth—also remains a drag on the economy. In an effort to help the sector, Beijing's central bank chief said it would cut the rate for first-time home purchases with loan terms over five years to 2.6 percent, from 2.85 percent. The moves represent some of China's most sweeping steps to boost the economy since September. But analysts pointed to a continued lack of actual stimulus funds needed to get the economy back on track—a task further complicated by trade headwinds with Washington. 'Even if the tariffs may be trimmed depending on the outcome of US-China trade talks, the persisting uncertainties will continue to accelerate decoupling structurally,' Gary Ng, senior economist for Asia Pacific at Natixis, told AFP. – AFP
RTHK
09-05-2025
- Business
- RTHK
Chinese exports up even as US shipments plunge
Chinese exports up even as US shipments plunge Piles of foreign trade containers await shipment at a terminal of Shanghai Port. Photo: CFoto/AFP Chinese exports rose last month despite the trade war raging with the United States, official data showed on Friday ahead of talks between the world's top two economies towards easing the standoff. Experts said that the forecast-smashing 8.1-percent rise indicated that Beijing was re-routing trade to Southeast Asia to mitigate US tariffs of up to 145 percent on Chinese imports imposed by President Donald Trump. Trade between the world's two largest economies has slumped since Trump imposed the tariffs and China responded with levies of 125 percent and other measures. The year-on-year increase in exports of 8.1 percent in April was much higher than the 2 percent forecast by analysts in a poll last month. The data from the Chinese customs bureau showed exports to Thailand, Indonesia and Vietnam surged by double digits, in what one analyst called a "structural repositioning" of trade. "The global supply chain is being rerouted in real time," Stephen Innes of SPI Asset Management wrote in a note. "Vietnam looks set to become China's offshore escape hatch for US-facing goods," he said. "The manufacturing juggernaut is diverting flow wherever the tariff pain isn't." Month-on-month exports to the United States plunged 17.6 percent. Analysts at ANZ Research said the data revealed "it is difficult to exclude China from the global supply chain in the short term, considering China's role in manufacturing." "The implied supply chain realignment as well as the expected outcome of Asia-US trade talks suggests no imminent collapse in China exports," they added. Global markets have been on a rollercoaster since Trump began his tariff offensive aimed according to the White House at bringing back manufacturing to the United States. While Trump has suspended for 90 days many of the most painful levies, those on China have remained in place. Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, also attributed the forecast-beating exports to "transshipment through other countries." But he also cited potential "trade contracts that were signed before the tariffs were announced." "I expect trade data will weaken in the next few months." Imports were also being closely watched as a key gauge of consumer demand in China, which has remained sluggish. They also beat expectations, dropping 0.2 percent, compared with the 6-percent slide analysts had estimated. (AFP)
Bloomberg
07-04-2025
- Business
- Bloomberg
The Freight Recession Isn't Going Anywhere Now
There's an old saying that all goods eventually get carried by a truck. Don't forget that those goods also likely were hauled by ships and trains and stored in a warehouse. With that in mind, look to the logistics industry for some of the first clues of how the economy and the business world will deal with the new reality of a protectionist US that President Donald Trump has set in motion. Although the reaction in the stock market to Trump's bid to upend global trade by implementing historically high tariffs has been swift and extremely negative, it will take some time for the impacts to take hold on how goods and production capacity are shuffled around the world. Expect the Asia-US and Europe-US shipping routes to suffer a drop in demand, while Latin America, which mostly dodged the heftiest tariffs, enjoys an increase. A decline in freight demand that portends weak consumer spending and even recession will exacerbate the glut of shipping and trucking capacity that has hung over the industry since the height of the pandemic.
