Latest news with #China-to-US
Yahoo
30-05-2025
- Business
- Yahoo
Air Cargo Demand to Slide From Prior Forecasts, IATA Says
Air cargo demand for 2025 is going to fall short of initial expectations, one industry body says. Although the International Air Transport Association (IATA) said in December that it expected air cargo demand to grow by 6 percent in 2025, the lobbying group representing 340 airlines is scaling back those projections. More from Sourcing Journal China-to-US Air Cargo Falls Off a Cliff as Tariffs Spur Charter Cancellations Inditex Gets Bangladesh's Inaugural Shipment on New Air Cargo Route JFK Airport's New $270M Cargo Hub Opens Amid Customs Clampdown 'A 6 percent growth forecast for 2025 will not be what you see in two weeks' time,' said Andrew Matters, director of sustainability and economics at the IATA, to delegates at the CNS Partnership Conference in Miami on Wednesday. That number already was a big step down from the 11.3 percent increase in cargo tonne-kilometers (CTKs) measured by IATA in 2024. That percentage was largely boosted by the flurry of e-commerce packages that flooded the U.S. throughout the year, as well as capacity restrictions in ocean shipping tied to the Red Sea crisis. Thus far in 2025, numbers haven't reflected that 6 percent growth would be in reach. Global air cargo demand increased 4.4 percent year over year in March, according to last month's IATA data. This followed a 0.1 percent demand contraction in February, the first such decline in demand since July 2023. Kicking off the year, January saw demand inch up 3.2 percent, IATA expects to reveal its updated projection for air cargo's annual growth at its annual general meeting in New Delhi from June 1-3. 'If you go back not too long ago, we were running at a double-digit growth rate which peaked at about 14 percent. Now, as everybody here knows, a growth rate of double digits is not sustainable,' said Matters at the conference. 'We've talked about all that has happened since then and, unsurprisingly, what we've seen more recently is moderation, back to something more sustainable.' President Donald Trump's 145-percent tariffs on Chinese goods had started to do a number on air cargo demand by April, furthering the decline. Before the tariffs were scaled back for 90 days, e-commerce air cargo shipments in late April from China to the U.S. dropped roughly 50 percent from the two-week period the year prior, according to freight forwarder Dimerco. Multiple Chinese air carriers had been canceling freighter services before the tariff situation changed. IATA hasn't released its April figures yet, but they are expected to reflect the same headwinds. 'Given the downside risks to the outlook that have increased substantially, and the downgrades to global economic activity, I think you can appreciate the direction forecasts are going to go when we see some new numbers,' Matters said. The IATA's initial forecasts also called for cargo yields to remain stable in 2025, as capacity constraints were initially projected to counteract the impact of falling jet fuel prices. Thus far, Matters said yields 'are a bit lower than in the past couple of years' for the first few months of 2025. In the first two months of the year, air cargo yields sank. They dropped 9 percent month over month in January, before falling again 6.1 percent sequentially in February. At the time, this was a 12-month low in air freight rates. Yields bounced back up 6.6 percent in March, likely as front-loading ahead of the tariffs crunched capacity and drove a monthly cargo demand rebound. The 90-day tariff reduction may help with getting a short-term spike in air cargo demand, capacity and rates. The global Baltic Air Freight Index calculated by air freight rate market data platform TAC Index gained 1.5 percent in the week to May 12, likely due to the cancellations ahead of Monday's announcement to scale back the duties. Judah Levine, head of research at Freightos, observed in a Tuesday weekly update that the tariff relief may entice some e-commerce volumes back to air cargo as it reduces the duty burden on low-value goods. But don't expect the massive bullwhip effect of cargo that is occurring out at sea. 'With the interim agreement keeping de minimis eligibility suspended for Chinese goods, and with formal entry filing costs often exceeding the value of many e-commerce shipments, it seems unlikely that this 90-day pause will have as strong an effect on air cargo as it may on ocean freight,' Levine said. Despite the downgraded outlook amid the geopolitical uncertainty, the IATA's Matters said the fundamentals for air cargo remain the same as they did in December. 'We now have this disruption that we have to overlay on top of those forecasts, and that's going to bring changes,' said Matters. 'Fundamentally, we started this year as an industry in good shape, with a positive outlook, and a lot of those factors remain to this day.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-05-2025
- Business
- Yahoo
NRF VP: Retailers ‘Need Clarity' on New China Tariff Deadline
Although the Trump administration's 90-day rollback of tariffs on Chinese imports has given retailers some breathing room to bring more product into the U.S., retailers remain largely in the dark over how to react once the Aug. 14 deadline looms. Due to the tariff truce, duties on most goods from China are now at 30 percent, well below the 145 percent total the tariffs escalated to ahead of the détente. More from Sourcing Journal US Ports Warn of $6.7B Bill if 100% Tariff on China-Made Cranes Kicks in Walmart Says It Will Increase Prices on Some Goods Because of Tariffs Hapag-Lloyd: China-to-US Volumes Surge 50% Since Tariff Rollback 'We still need clarity from the administration on what happens post-Aug. 14,' said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation (NRF). 'I don't think they've figured it out yet, to be honest.' In a webinar hosted by freight booking platform Freightos Monday morning, Gold noted that the question remains whether the tariffs will increase again to 145 percent if a deal is not made—which he believes is not likely. But he didn't rule out the possibility of an 80 percent or 100 percent tariff based on President Donald Trump's prior communications on Truth Social, as well as numbers initially touted during his election campaign. The China deadline isn't the only one on U.S. retailers' minds, with the original 90-day pause of country-specific reciprocal tariffs ending on July 9. 'Right now, you're going to see more front-loading as folks are trying to rush between those two different expiration dates. The front-loading we've seen to date does not include the holiday merchandise for later in the year, because the order is typically placed now or last month, and that doesn't start coming in until late summer,' Gold said. Gold predicts a 'ramp up' in the next few months by retailers looking to get holiday merchandise into the U.S., further pulling forward the traditional August-to-October peak shipping season. 'A lot of retailers are going to try and beat that Aug. 14 date from China not knowing what's going to happen,' Gold said. 'Retailers don't want to get caught with product, and then the tariff goes back up to 80 or 100 percent, or higher.' During the webinar, Gold observed the similarities within the current environment on the trans-Pacific trade lane as that of during the Covid-19 pandemic. The decline in capacity due to blank sailings and vessel swaps from when carriers adapted lower demand had already begun to reverse once the 90-day rollback was initiated. 'You're already starting to see the peak season surcharges starting to come into effect and see increases in freight rates,' said Gold. 'It's great that we got the tariff rate down, but now you're seeing an increase in shipping costs. Again, retailers are going to pay one way or the other, and those costs are going to get passed along, unfortunately.' Judah Levine, head of research at Freightos, noted his company has seen demand already 'pick up sharply,' which could make it more difficult for businesses to secure ocean freight space in the short term. Exacerbating that concern, fewer empty containers than usual are headed to China from the U.S. due to the previous falloff in trans-Pacific volumes. 'Those volumes are rebounding alongside vessels and equipment that are now out of place and are being shifted back into place, but will take some time,' said Levine. 'The quick restart could also mean a big bump in the number of vessels and container volumes that are going to arrive at U.S. ports in a few weeks. So taken together, shippers could face some difficulty securing space and some congestion and delays the next few weeks, mostly with origins in East Asia and the U.S.' Congestion and equipment shortages would likely subside as vessels and equipment moved back into place, making them less of a long-term concern than the future of the tariffs. While one of the major purported long-term goals of the tariffs was to incentivize reshoring or nearshoring, much of that has yet to take hold, Gold said there hasn't any clear trend that new U.S. manufacturing activity has been spurred on. 'You've seen a lot of announcements from a number of companies about making investments here in the United States, but that's going to take time before those investments actually take effect,' Gold said. 'It's limited, and all the uncertainty over the tariffs makes it very difficult for folks to make those decisions when tariffs can change at a moment's notice.' Gold noted that a manufacturing renaissance would still rely on imported inputs and components, which themselves are subject to tariffs. Sign in to access your portfolio
Straits Times
17-05-2025
- Business
- Straits Times
Container shipowners swamped as US-China trade detente revives demand
Container ship bookings for China-to-US cargo have surged since the countries declared a 90-day truce on punitive tit-for-tat tariffs last weekend. PHOTO: REUTERS LOS ANGELES/HONG KONG - Container ship bookings for China-to-US cargo have surged since the countries declared a 90-day truce on punitive tit-for-tat tariffs last weekend, operators said, spawning traffic jams at Chinese ports and factories that could take weeks to clear. US importers of sneakers and sofas to construction supplies and auto parts are racing to get goods in before the deadline resets tariffs again, setting the stage for disruptions that recall the global transport quagmire during the Covid-19 pandemic. The cargo surge at major trade gateways like Shenzhen's Yantian Port, which handles more than a quarter of China's exports to the United States, has ship owners scrambling to coordinate berths and adjust vessel schedules. 'The demand is so high that we can only serve customers who have made long-term contracts with us,' a spokesperson for German container ship operator Hapag-Lloyd told Reuters. 'We have hardly enough space for spontaneous bookings.' Container-tracking software provider Vizion said average bookings for the seven days ended on May 14 soared 277 per cent to 21,530 20-foot equivalent units from the 5,709 twenty-foot equivalent units (TEUs) average for the week ended May 5. Owners of factories that make toys to holiday decor told Reuters they are booking previously frozen cargo headed to US stores, including Walmart. Lalo, for example, which sells its baby furniture online and through retailers like Target and is among the companies that gave factories the green light to move their finished orders. 'We had hundreds of thousands of units waiting to ship,' said Lalo co-founder Michael Wieder. 'These products can now get on the water.' 'Everybody is very busy from my company, at my friend's companies,' said Mr Richard Lee, chief executive of NCL Logistics, in China's southern metropolis of Shenzhen. 'They are preparing a lot of cargo, a lot of products, to be shipped immediately from China to the US.' SECOND TSUNAMI? The shipping surge will translate into a rush of arrivals at US West Coast ports in the coming weeks. Still, industry experts, including the executive director of the Port of Los Angeles - the busiest US seaport and No. 1 for ocean shipments from China, do not foresee a Covid-level tsunami of cargo. Rather, they project a large, but manageable wave. On May 15, the off-contract spot rate from Shanghai to Los Angeles shot up 16 per cent from the prior week to US$3,136 (S$4,080) per 40-foot container, according to data from maritime consultancy Drewry. That is less than half than in April 2024, but could jump sharply on June 1 to about US$6,000 per container if shipowners push through rate increases. In the early days of the pandemic, as now, cargo demand spikes overwhelmed factories and container ships, kinking supply chains. Shipping and retail experts said 90 days is not enough time for most factories to fill new orders. Fewer slots are available on cargo ships because vessel owners had been culling China-to-U.S. voyages and schedules. Now, ocean carriers are 'cancelling cancellations' of sailings, Drewry said. Demand, however, is markedly different this time. Mr Trump's second-term tariffs have weakened US retail sales, homebuilding and manufacturing - key drivers of container shipments. Moreover, many US companies are sitting on inventory accumulated before Mr Trump imposed tariffs on China and other countries. And nobody knows what import duties will be when the 90-day deadline expires in August. The Trump administration confirmed to Reuters that the U.S. rate would reset to 54 per cent, assuming no agreement is reached by the deadline. High anxiety Many retailers are prioritising which products to order and ship, said Ms Jessica Dankert, vice-president of supply chain for the Retail Industry Leaders Association trade group, whose members include Home Depot, Gap and Dollar General. 'It's still 30 per cent at the end of the day,' said Mr Jamie Salter, chief executive of Authentic Brands Group, referring to tariffs on China. Authentic Brands owns and licences clothing brands including Reebok, Champion, and Forever 21. Some large suppliers to Detroit's Big Three automakers told Reuters that on customers' requests, they are flying in parts from China and stockpiling them. Others declined to add to inventories, saying they lacked the space and funds to do so. A Halloween goods exporter from the city of Yiwu in China, who gave her English name, Cecilia, said tariff increases have cut total orders in half in 2025 and warned that prospective buyers are running out of time. 'If you order now, you will have an anxious wait to see if it will be too late,' she said. Mr Jimmy Zollo, chief executive at Joe and Bella, sells Chinese-made clothing for adults who have trouble dressing themselves due to arthritis, dementia or being in a wheelchair. He placed a new order with his supplier, even though the 90-day window could close before he can take delivery. 'We're hopeful that a new trade agreement is implemented, and the lowered tariffs do not expire,' Mr Zollo said. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
17-05-2025
- Business
- Business Times
Container ship owners swamped as US-China trade detente revives demand
[LOS ANGELES] Container ship bookings for China-to-US cargo have surged since the countries declared a 90-day truce on punitive tit-for-tat tariffs last weekend, operators said, spawning traffic jams at Chinese ports and factories that could take weeks to clear. US importers of sneakers and sofas to construction supplies and auto parts are racing to get goods in before the deadline resets tariffs again, setting the stage for disruptions that recall the global transport quagmire during the Covid-19 pandemic. The cargo surge at major trade gateways like Shenzhen's Yantian Port, which handles more than a quarter of China's exports to the US, has ship owners scrambling to coordinate berths and adjust vessel schedules. 'The demand is so high that we can only serve customers who have made long-term contracts with us,' a spokesperson for German container ship operator Hapag-Lloyd told Reuters. 'We have hardly enough space for spontaneous bookings.' Container-tracking software provider Vizion said average bookings for the seven days ended on Wednesday soared 277 per cent to 21,530 20-foot equivalent units (TEU) from the 5,709 TEU average for the week ended May 5. Owners of factories that make toys to holiday decor told Reuters they are booking previously frozen cargo headed to US stores, including Walmart. 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 Lalo, for example, which sells its baby furniture online and through retailers such as Target and is among the companies that gave factories the green light to move their finished orders. 'We had hundreds of thousands of units waiting to ship,' said Lalo co-founder Michael Weider. 'These products can now get on the water.' 'Everybody is very busy from my company, at my friend's companies,' said Richard Lee, chief executive of NCL Logistics, in China's southern metropolis of Shenzhen. 'They are preparing a lot of cargo, a lot of products, to be shipped immediately from China to the US.' Second tsunami? The shipping surge will translate into a rush of arrivals at US West Coast ports in the coming weeks. Still, industry experts, including the executive director of the Port of Los Angeles – the busiest US seaport and No 1 for ocean shipments from China – do not foresee a Covid-level tsunami of cargo. Rather, they project a large, but manageable wave. On Thursday (May 15), the off-contract spot rate from Shanghai to Los Angeles shot up 16 per cent from the prior week to US$3,136 per 40-foot container, according to data from maritime consultancy Drewry. That is less than half than in April 2024, but could jump sharply on Jun 1 to about US$6,000 per container if ship owners push through rate increases. In the early days of the pandemic, as now, cargo demand spikes overwhelmed factories and container ships, kinking supply chains. Shipping and retail experts said 90 days is not enough time for most factories to fill new orders. Fewer slots are available on cargo ships because vessel owners had been culling China-to-US voyages and schedules. Now, ocean carriers are 'cancelling cancellations' of sailings, Drewry said. Demand, however, is markedly different this time. Trump's second-term tariffs have weakened US retail sales, homebuilding and manufacturing – key drivers of container shipments. Moreover, many US companies are sitting on inventory accumulated before Trump imposed tariffs on China and other countries. And nobody knows what import duties will be when the 90-day deadline expires in August. The Trump administration confirmed to Reuters that the US rate would reset to 54 per cent, assuming no agreement is reached by the deadline. High anxiety Many retailers are prioritising which products to order and ship, said Jessica Dankert, vice-president of supply chain for the Retail Industry Leaders Association trade group, whose members include Home Depot, Gap and Dollar General. 'It's still 30 per cent at the end of the day,' said Jamie Salter, CEO of Authentic Brands Group, referring to tariffs on China. Authentic Brands owns and licenses clothing brands including Reebok, Champion and Forever 21. Some large suppliers to Detroit's Big Three automakers told Reuters that on customers' requests, they are flying in parts from China and stockpiling them. Others declined to add to inventories, saying they lacked the space and funds to do so. A Halloween goods exporter from the city of Yiwu in China, who gave her English name, Cecilia, said tariff increases have cut total orders in half this year and warned that prospective buyers are running out of time. 'If you order now, you will have an anxious wait to see if it will be too late,' she said. Jimmy Zollo, CEO at Joe and Bella, sells Chinese-made clothing for adults who have trouble dressing themselves due to arthritis, dementia or being in a wheelchair. He placed a new order with his supplier even though the 90-day window could close before he can take delivery. 'We're hopeful that a new trade agreement is implemented, and the lowered tariffs do not expire,' Zollo said. REUTERS
Yahoo
15-05-2025
- Business
- Yahoo
Walmart Says It Will Increase Prices on Some Goods Because of Tariffs
Walmart CEO Doug McMillon had a clear message for investors Thursday: 'Higher tariffs will result in higher prices,' the executive said on the company's earnings call. Walmart has long been considered a strong option for low-priced goods for Americans. But President Donald Trump's tariff strategy could be forcing the retailer to change course on prices. More from Sourcing Journal Walmart Reiterates 2025 Outlook, But Doesn't Make a Q2 Earnings Promise Hapag-Lloyd: China-to-US Volumes Surge 50% Since Tariff Rollback Temu Re-Ups Direct-from-China Shipments Amidst Tariff Pause Walmart had previously warned that the impact of tariffs could drive its prices up. McMillon said that's now becoming a reality. 'We will do our best to keep our prices as low as possible,' McMillon said on the earnings call. 'But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren't able to absorb all the pressure given the reality of narrow retail margins.' John David Rainey, Walmart's chief financial officer, said in an interview with CNBC Thursday that the cost increases would come in the very near future. 'You'll begin to see that, likely towards the tail end of this month, and then certainly much more in June,' Rainey told CNBC. Only about one-third of Walmart's final assortment is imported into the U.S., which safeguards it more heavily than some competitors. Amazon, for instance, has a higher reliance on China; data from Amazon seller platform Jungle Scout shows that about 70 percent of Amazon brands or sellers noted that they source products from China. Walmart, meanwhile, imports about one-third of its U.S. assortment from companies like China, Mexico, Canada, Vietnam and India, Rainey said. While China has seen the highest enforceable tariff rates among those countries, Vietnam saw a staggering threat of 46 percent on Trump's 'Liberation Day.' For the moment, Trump has instated two separate 90-day pauses on tariffs—one which has seen the rate on Chinese goods drop to 30 percent, and another which has given other countries a chance to come to specific trade deals with the U.S. McMillon said the tit-for-tat trade strategy with China has the power to inflict the highest cost increases for the retailer. 'All of the tariffs create cost pressure for us, but the larger tariffs on China have the biggest impact,' he told investors. Rainey told investors that Walmart has 'certain categories of merchandise that we're dependent upon to import from other countries.' McMillon said that, for some impacted general merchandise categories, the company would look to 'move production where that's possible.' 'That isn't easy or fast, but we've been working on that for years, so it's not like we've just started to make adjustments,' McMillon said after noting earlier in the call that Walmart remains 'hopeful' that the U.S. and China will strike up a longer-term agreement that would see brands and retailers paying 'even lower tariffs.' While America's largest retailer is on the brink of upping prices despite the lowest tariff rate on China in recent weeks, China-founded e-commerce companies may be taking a more opportunistic approach to the decreased duty rates. Shein told customers Wednesday that it had 'lowered [its] prices across a wide range of styles.' 'Whether you've been holding off or just haven't checked in lately, now's the perfect time to find your next summer fit!' the company wrote in a customer email published to its site. Last month, Shein and competitor Temu announced that they would both raise prices on April 25 to account for economic fluctuations and added costs attributed to tariffs. Shein's decision to once again cut product prices did not directly cite tariffs. However, the announcement came just days after Trump announced tariffs on many goods inbound from China would drop to 30 percent, then noted that shipments under $800 inbound from China via international post would be subject to a 54-percent tariff or $100 flat duty. Shein's web page also alerts consumers to the fact that the amount they pay at checkout is inclusive of any applicable tariffs on goods they purchase. 'You'll never be asked to pay any tariffs or additional fees before or after your package is delivered,' the company promises.
