Latest news with #Trans-Pacific
Yahoo
19 hours ago
- Business
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US Pushes Global Partners for Trade Deals by Wednesday
With an eye toward finalizing trade agreements ahead of its self-imposed July 9 deadline, the White House is pushing global trade partners to submit their most attractive offers to the U.S. by Wednesday. According to a draft of a U.S. Trade Representative (USTR) letter viewed by Reuters, the Trump administration is seeking to expedite the closure of deals with a number of countries. More from Sourcing Journal Trade Truce Crumbles as China Says US Violated Terms Trans-Pacific Ocean Freight Rates Continue Their Ascent on More Front-Loading How Should Brands Think About Cross-Border E-Commerce Amidst Uncertainty? Within the document, presumably to be sent to foreign trade officials, the administration asked for proposals related to the lowering of tariffs and non-tariff trade barriers along with quotas for the purchase of U.S. goods like agricultural and industrial products. It also asked for details about other commitments countries might make related to digital commerce and economic security. The outlet reported that the USTR wrote that it would evaluate responses with the intent of creating 'a possible landing zone' for negotiations which could include a new rate for reciprocal duties. In the weeks since President Donald Trump's April 2 'Liberation Day' announcements and the subsequent deferral of so-called 'reciprocal' duties, cabinet officials have touted progress in trade negotiations between the U.S. and dozens of trading partners. While talks have been in progress with Vietnam, India, Japan and the European Union, only one deal—which can be more accurately described as a framework for an agreement—has been finalized with the United Kingdom. The ambitious June 4 request for proposals underscores a sense of urgency within the administration. Just five weeks remain until Trump's reciprocal duties, which were deferred for a period of three months on April 9, will resume, blanketing imports from across the globe in double-digit duties. Since the White House's tariff schemes were unveiled, they've thrown markets into tumult and shaken up global sourcing and supply chains. According to a Monday report from the South China Morning Post, U.S. retailers and big box stores like Walmart have been pushing their suppliers in China to take on more of the tariff burden that's been foisted upon them—some demanding that their overseas partners pay up to 66 percent of the added duties. After Walmart's chief executive spoke out about the impact the tariffs might have on prices at retail during an earnings call last month, Trump directed the retailer to 'eat the tariffs' rather than pass along the cost to consumers. Trade talks with China have all but 'stalled,' according to administration officials. In recent days, both China and the U.S. have accused the other of undermining negotiations following the establishment of a three-month trade truce last month. While tensions between the two countries are running high, White House press secretary Karoline Leavitt said Monday that Trump and Chinese President Xi Jinping would likely speak sometime this week. And over the weekend, the USTR quietly released a Federal Register notice announcing extensions of certain existing tariff exclusions from Section 301 duties until Aug. 31. The notice said that a three-month extension would be granted on 164 exclusions that were extended in May of last year, along with 14 exclusions that were established in September. The products covered by the exclusions include mostly solar manufacturing equipment, technology and electronics, and some Covid-related goods. 'The US Trade Representative's decision to extend these exclusions takes into account public comments previously provided, previous advice of the advisory committees, and the interagency Section 301 Committee,' the notice said.
Yahoo
a day ago
- Business
- Yahoo
As CMA CGM Flirts with Red Sea Comeback, Will Others Follow Suit?
CMA CGM is reshuffling its deck of vessels to expand its presence in the Red Sea. Starting in June, the ocean carrier will reroute its Med Express (MEDEX) service—which connects ports across the Middle East, Indian subcontinent and Mediterranean Sea—back through the Suez Canal. More from Sourcing Journal Carriers Ramp Up Trans-Pacific Capacity on Expected Demand Rally CMA CGM's $600M Vietnam Port Project Reflects 'Sharp' Container Demand Trans-Pacific Cargo Space Vanishing Fast Ahead of Tariff Deadlines According to a CMA CGM spokesperson, the container shipping firm is reallocating ships on a trade lane that had already been temporarily using the Suez route, and is not deploying additional vessels via the Red Sea and Bab el-Mandeb Strait. 'At this stage, the majority of the Group's vessels continue to be rerouted via the Cape of Good Hope,' the spokesperson told Sourcing Journal. 'CMA CGM does not plan to resume transits through the Suez Canal on a large scale in the short term, unless security conditions allow it. Until further notice, the CMA CGM Group will continue to seek escort assistance from the European Union Naval Force's Operation ASPIDES for its ships to ensure the highest level of safety for its crew members, vessels, and its customers' cargo.' The first westbound transit on the route will be with 9,700 20-foot equivalent unit (TEU) CMA CGM Pelleas ship, which will leave Sri Lanka's Colombo Port on June 10. The ship will also conduct the first eastbound voyage for the service out of Jeddah Islamic Port in Saudi Arabia on July 24. The weekly service line will use a fleet 10 ships that can carry between 6,000 to 10,000 TEUs, and dock at ports including Nhava Sheva and Mundra in India, Abu Dhabi and Jebel Ali in the U.A.E., Genoa in Italy and Barcelona and Valencia in Spain, among others. Fourteen ports comprise the MEDEX line, which last, Since late 2023, when the Yemen-based Houthi militant group began attacking commercial vessels in the Red Sea and Bab el-Mandeb Strait, CMA CGM had opted for MEDEX vessels to instead sail around Africa's Cape of Good Hope. The longer route adds between one and two weeks to total ocean transit times, and has been a key determinant in pushing up freight rates due to the ensuing capacity crunch. A Red Sea return would mark a big step for container shipping in returning to the conflict-ridden waterway, which remains a no-go zone for most ocean carriers concerned about the attacks. Although the Houthis haven't attacked a container ship thus far in 2025, and have appeared to indicate they won't be targeting non-Israeli ships any longer, the industry has still been hesitant about redeploying ships in the area. 'The open question for now is of course how many services we need to see from CMA CGM reverting back to the Red Sea before the other major carriers will re-assess and also revert back to a Suez routing,' said Lars Jensen, CEO of Vespucci Maritime, in a post on LinkedIn. Companies have been avoiding a return largely because they cannot guarantee safety on the route, and because war-risk insurance premiums for carriers remain elevated compared to pre-Red Sea crisis levels. The higher freight rates also add an incentive, contributing to higher profits industrywide. Unlike the other major carriers, CMA CGM hasn't spurned the Suez Canal entirely since the Houthis began their onslaught on shipping. The France-based company opened up transit on a case-by-case basis in February 2024, and had already been working with the French Navy to help escort vessels through the Red Sea when necessary. This is a benefit major carriers like Denmark-based Maersk and Switzerland-based Mediterranean Shipping Company (MSC) don't have. CMA CGM's fleet has regularly been sailing one service on the Suez route as part of the Ocean Alliance the carrier has with Cosco Shipping, Orient Overseas Container Line (OOCL) and Evergreen. The weekly BEX2 (Phoenician Express) service from Far East to the Mediterranean has been in regular rotation since July 2024. That line stops at major Asian ports including Shanghai and Ningbo in China, Busan, South Korea and Singapore. It likely strayed away from Houthi attention because it transported cargo to and from Beirut, Lebanon, according to Alphaliner. On June 23, CMA CGM also plans to do a single Suez Canal voyage via its Far East-to-Mediterranean MEX service, when the 16,000-TEU CMA CGM Jules Verne leaves eastbound from Jeddah. The Ocean Alliance service is not a permanent shift. Both the services and one-offs have put CMA CGM far ahead of competitors when it comes to Suez sailings. CMA CGM ranked first in net tonnage of container vessels passing through the Suez Canal from January to April, representing 19 percent of cargo moved during that period. During the quarter, 486 container vessels sailed through the Suez Canal, amounting to 17,234 metric tons. During a meeting with the Suez Canal Authority earlier this month, CMA CGM's executive vice president of assets and operations, Christine Cabeau, hinted at the MEDEX shift. She indicated that the group wanted a second fixed service to traverse the canal. The Suez Canal Authority, which has seen substantial losses in revenue since the Houthi attacks began, is offering 15-percent rebates for container vessels opting to sail through the trade artery. Sign in to access your portfolio
Yahoo
a day ago
- Business
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Trans-Pacific Ocean Freight Rates Continue Their Ascent on More Front-Loading
Trans-Pacific ocean spot freight rates have kept their foot on the gas in the wake of a rush of imports from China into the U.S. as trade and tariff uncertainty pervades between the countries. On Friday, the Shanghai Containerized Freight Index (SCFI) calculated a surge of nearly 31 percent from the week prior out of the Chinese city across all markets, with West Coast-bound spot rates skyrocketing 58 percent to $6,243 per 40-foot equivalent unit (FEU). Rates soared 46 percent to $5,172 per container headed to the East Coast. More from Sourcing Journal How Should Brands Think About Cross-Border E-Commerce Amidst Uncertainty? As CMA CGM Flirts with Red Sea Comeback, Will Others Follow Suit? Can Tech Plug the Gaps Between Immigration Policies and Reshoring Aspirations? The weekly 30.6 level gain to 2,072.71 points represents the second-largest individual gain tracked by the index, following the final week of December 2023 as ocean carriers began avoiding the Red Sea en masse. Abercrombie & Fitch is one apparel retailer that has already baked in higher freight costs for their second quarter, chief financial officer Robert Ball said in a Wednesday earnings call. All the major indices that monitor ocean freight rates have indicated significant jumps to close out May, with the SCFI showing the highest increases. According to Drewry's World Container Index (WCI) posted Thursday, freight rates from Shanghai to Los Angeles leapt 17 percent to $3,738 per FEU in the past week and 38 percent since May 8. Spot rates to New York have risen 14 percent in the past week to $5,172 per container, and have accelerated 42 percent in the past three weeks. These numbers buoyed the overall WCI to 10 percent growth to $2,508 per container, marking the first double-digit rise in the composite index since last July. For Freightos, Asia-to-U.S. West Coast prices increased 13 percent to $2,788 per FEU, according to data revealed on Wednesday. The Freightos Baltic Index (FBX) bucked the trend of the other benchmarks, with Asia-to-U.S. East Coast prices seeing a bigger jump than their West Coast counterpart. Spot freight rates per container increased 20 percent to $4,223. 'Surging demand and these restrictions on capacity from out of place vessels and port congestion [at Chinese ports] are putting significant upward pressure on container rates,' said Judah Levine, head of research at Freightos, in Wednesday's weekly update. 'Rates are at their highest level since late February, and GRIs announced through mid-June could push prices up thousands of dollars more if demand stays elevated and congestion remains an issue.' Ongoing front-loading of imports will lead to big increases in spot rates on June 1, according to data from Xeneta. 'Average spot rates will rise at least 18 percent from the Far East to U.S. West Coast and 14 percent into the U.S. East Coast,' said Emily Stausbøll, senior shipping analyst at Xeneta. 'Data is being received from shippers paying far higher rates than this, so the market has the potential to increase even more dramatically in early June.' While a June spike could be in order, the combination of importers' front-loading and ocean carriers moving more shipping capacity to the trans-Pacific trade lane could be what slows rates down in the second half of 2025. Drewry's Container Forecaster expects the supply-demand balance to weaken again in the latter six months, which would cause spot rates to decline again for the back half. But the volatility and timing of rate changes will depend on the outcome of the ongoing legal challenges to President Donald Trump's tariffs and on possible capacity changes related to the introduction of the U.S. port docking fees on Chinese ships, which are uncertain. Xeneta's Stausbøll projects a longer-term decline in the third quarter as well, particularly when the expected period of front-loading ends. 'While tariffs are lower, they are still higher than they were previously, so there is every likelihood this will subdue consumer demand,' Stausbøll said in a May 21 blog post. 'Once shippers have built up inventories, they will not continue to front-load imports. Demand will therefore ease and carriers will once again be struggling to fill their ships. This means the traditional Q3 peak season will arrive earlier in 2025, but it should not take too long for spot rates to soften and continue the downward trend seen during Q1.' Currently, the base tariff rate on the majority of Chinese products is 30 percent after the U.S. and China entered into a 90-day tariff rollback. The agreement lowered the tariff rate from 145 percent for U.S. importers until Aug. 14. 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
a day ago
- Business
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Trade Truce Crumbles as China Says US Violated Terms
A short-lived truce between Beijing and Washington has come to a crashing halt. After announcing a 90-day stay on punitive duties for China-made goods last month, President Donald Trump took to Truth Social on Friday to rail against the country's government, saying China 'totally violated' its agreement with the U.S. The Commander in Chief did not provide further details about the breach of terms. More from Sourcing Journal Trans-Pacific Ocean Freight Rates Continue Their Ascent on More Front-Loading How Should Brands Think About Cross-Border E-Commerce Amidst Uncertainty? Can Tech Plug the Gaps Between Immigration Policies and Reshoring Aspirations? The Chinese Commerce Ministry hit back on Monday, saying that the U.S. is 'provoking new economic and trade frictions' that 'seriously undermine' the agreement that was reached in mid-May. A spokesperson asserted that China has been 'strictly implementing' the terms that were agreed upon when officials from both countries met in Switzerland. The framework centered on lowering trade barriers and tariffs by 115 percent for three months while a more permanent deal is hashed out. 'Instead of reflecting on its own actions, the United States has groundlessly accused China of violating the consensus, a claim that grossly distorts the facts. China firmly rejects these unjustified accusations,' the spokesperson added. According to Chinese officials, the U.S. has invalidated the terms of the Geneva truce by halting the sale of software for designing computer chips to China's tech firms, taking aim at Huawei, a Chinese technology and electronics company, and revoking visas for Chinese students in the U.S. During a Friday appearance on CNBC, U.S. Trade Representative Ambassador Jamieson Greer said that China was 'slowrolling' compliance with the terms of the agreement, noting that he believes U.S. companies have been placed on Chinese blacklists and that exports of rare earth minerals to the U.S. have been restricted. One day earlier, Treasury Secretary Scott Bessent noted that negotiations between the world's two largest economies has been 'a bit stalled.' Volatility is poised to continue, with members of administration saying Sunday that the president's global tariff regime won't be derailed by a recent ruling from the Court of International Trade (CIT). Last week, the federal judicial body handed down a decision that Trump's universal baseline tariffs and reciprocal duties on more than 90 countries across the globe were invalid. The president overstepped his executive authority by attempting to use the International Emergency Economic Powers Act (IEEPA) to levy the sweeping import taxes, a panel of three judges said. Less than a day later, a Washington, D.C. federal appeals court implemented a stay on the CIT's decision as it reviews the details of the case and the ruling. 'Rest assured, tariffs are not going away,' Commerce Secretary Howard Lutnick said during an interview on Fox News Sunday. The president has 'so many other authorities that even in the weird and unusual circumstance where this was taken away, we just bring on another or another or another,' he added, referencing other trade laws and provisions that the administration could wield to continue to carry out its agenda. Throughout last week's judicial ping pong match, the president stayed mostly mum. But on Sunday, he commented on the issue, Truthing, 'If the Courts somehow rule against us on Tariffs, which is not expected, that would allow other Countries to hold our Nation hostage with their anti-American Tariffs that they would use against us. This would mean the Economic ruination of the United States of America!'
Yahoo
6 days ago
- Business
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Urban Outfitters Spurns Air for Ocean Freight as Tariffs Settle in
Urban Outfitters is taking on tariffs by shifting its primary mode of cargo transportation from air freight to ocean freight, cutting a major cost in its inbound logistics network. Even as trans-Pacific ocean freight rates have accelerated since the Trump administration's 145-percent tariffs on Chinese imports were scaled back for 90 days, ocean freight is generally significantly cheaper than air freight. As of September 2024, Drewry Airfreight Insights calculated that air cargo costs 5.6 times more to ship than its oceangoing counterpart. More from Sourcing Journal Trump Threatens EU With 50% Duties, Says Trade Talks 'Going Nowhere' April Retail Sales Were Rocky, in Line With Tariff Turmoil Trans-Pacific Cargo Space Vanishing Fast Ahead of Tariff Deadlines The air-to-sea conversion would protect margins, but won't come without its drawbacks. Urban Outfitters CEO and president Dick Hayne said the ocean-bound voyage adds about 30 days to delivery times. It remains unclear what percentage of cargo Urban Outfitters moves via ocean with the switch, or if the retailer has stopped shipping via air entirely. Sourcing Journal reached out to Urban Outfitters. 'There is always a risk as you go out in time that the fashion might not be as accurate as we would like it to be,' Hayne acquiesced in the Wednesday first-quarter earnings call, noting that the company is trying shorten that time period via merchandise planning and inventory management technologies. To account for the 30 extra days at sea, the lifestyle apparel retailer is planning to bring in fall product earlier in the second quarter. 'While there is some fashion risk of bringing product in early, we believe that it is prudent planning to bring in fall inventory—which is less sensitive to fashion—early, given the uncertain tariff outlook and any potential supply chain disruptions that could occur in the future,' said Urban Outfitters' chief financial officer Melanie Marein-Efron. With that in mind, Marein-Efron noted that the Anthropologie and Free People parent would likely see inventory growth ahead of sales growth in Q2. The shift runs counter to moves the retailer made during the Covid-19 pandemic, when supply chain congestion snarled activity at seaports worldwide. During the late-summer peak shipping season in 2021, the retailer pivoted to bring most of its inventory from Vietnam into the U.S. via air freight. This was due to the port congestion alongside record-high ocean spot freight rates that swelled north of $10,000 per container in September that year, according to the Drewry World Container Index (WCI). As of Friday, the average container costs $2,276. According to co-president and chief operating officer Frank Conforti, the company is also mitigating tariffs in ways similar to its retail counterparts: shifting countries of origin where possible, negotiating better terms with vendors and sparingly raising prices. The retailer is already well-hedged against the higher tariffs levied on China, with the country representing less than 5 percent of worldwide production. India, Vietnam, and Turkey are the retailer's three largest countries of origin, with no single country accounting for more than 25 percent of production. 'Over the last several years the teams have worked hard to diversify our countries of origin as well as dual source most of our own brand products,' said Conforti. 'This means many of our products are made in two different origins, enabling us to shift production from one country to another if needed.' Urban Outfitters had a strong first quarter in the face of the tariff concerns, with net sales jumping 10.7 percent to a record $1.3 billion. The retailer also generated a record $108.3 million. But the forward-looking projections for margins were a promising sign for the business, with the company expecting to achieve 50 to 100 basis points of gross margin improvement for the fiscal year. Stock has jumped more than 22 percent since the Wednesday earnings call. Urban's shift to ocean freight reflects a wider trend as more companies scramble to import cargo into the U.S. ahead of the July 9 country-specific tariff deadline and the Aug. 14 China duty deadline. For the week ending May 12, U.S. import bookings expanded 48.5 percent from the week prior, according to data from container tracking platform provider Vizion. But with the flood of cargo back on the oceans, a shortage of capacity is already rearing its head across container shipping. Multiple freight forwarders have indicated that additional space isn't expected to open until June, as shippers also sought to get ahead of peak season surcharges and general rate increases (GRIs) set to be implemented that month. Earlier this week, American Shipping Company told customers that booking requirements are now at a minimum of three to four weeks before the target vessel sailing date. Maritime trade advisory service Sea-Intelligence issued warnings Thursday that in the immediate future, 'there is not yet a meaningful injection' of new capacity on trans-Pacific trade to the North American West Coast. 'This development, or lack thereof, to the West Coast becomes even more noteworthy in the face of the development to the East Coast, where it does appear that there is already some attempt to increase capacity, relative to a week ago,' said Alan Murphy, CEO of Sea-Intelligence, in the weekly update. According to Sea-Intelligence, there is a continuing year-over-year reduction in ocean freight capacity to both coasts until the start of June, before the West Coast availability tapers off again throughout the month. 'The West Coast only sees a meaningful increase from mid-July, whereas the East Coast sees a significant capacity growth from end-June,' Murphy said. 'But this is still very late for a capacity increase, if there is an imminent surge of cargo from China.' Sign in to access your portfolio
