- Shipping Rates Soar as Importers Rush Post-Tariff Pause.
- Freight Bookings from China Jump 275% in One Week.
- Port of LA Sees 30% Drop Before Demand Rebound.
After a trade agreement was reached between China and the United States, importers are gearing up for a significant surge in cargo volumes. This increase in demand is likely to push ocean freight rates higher, which will, in turn, affect consumer prices. The agreement followed former President Donald Trump’s decision to pause steep tariffs on Chinese goods for 90 days, slashing import taxes from 145% down to 30%, reports Investopedia.
Freight Bookings Skyrocket
Shipping companies are already seeing the effects. “Ocean freight bookings from China to the U.S. are up 275% this week over last week. There won’t be enough ships for all this cargo. Get ready for surge pricing,” said Ryan Petersen, CEO of shipping firm Flexport, in a post on X.
Container Rates on the Rise
This sudden uptick in demand is also evident in global shipping prices. According to Drewry’s World Container Index, rates for the week ending May 15 saw an 8% increase compared to the previous week. Notably, freight costs from Shanghai to New York soared by 19%, while rates from Shanghai to Los Angeles climbed by 16%.
Uncertainty Drives Consumer Costs
“There’s a lot of uncertainty. When there’s uncertainty in shipping, that means higher costs. Higher costs get pushed onto you, the consumer,” said Sal Mercoglian, a maritime history professor at Campbell University who specialises in shipping issues.
Port Volumes Dip Before the Rebound
Earlier in the month, volumes at key ports had declined sharply due to the impact of the 145% tariff before the truce took effect.
“Volume in the first week of May here at the Port of LA was down more than 30% on the import side of our ledger,” said Gene Seroka, executive director of the Port of Los Angeles.
What’s Next for U.S. Consumers?
As shipping volumes rebound and freight rates rise, industry leaders warn of broader economic effects.
“What probably comes out of this are lower inventory levels across the board, less selection for American consumers, and maybe higher prices,” Seroka added.
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Source: Investopedia
