Trade Analysis: Transpacific: cargo-partner

Main Ports: Far East to US West Coast

Main Ports: Far East to US East Coast

^{Source: Market average rates for 40‘ containers according to www.xeneta.com}

Trade Analysis: Transpacific

Situation

Shipping lines have raised their rates, putting additional pressure on shippers, even as overall market conditions remain challenging. Available capacity on this trade has been reduced to around 60-70% of normal levels, but a recovery toward approximately 80% of regular capacity is expected in November.
Following the recent meeting between the US and Chinese presidents in South Korea, the two countries agreed to suspend their respective port call fees and the implementation of retaliatory tariffs on Chinese imports for one year.

Obstacles

Ongoing tariff uncertainty continues to affect the market. The mood surrounding the ongoing trade dispute between the US and China currently seems more relaxed but it remains to be seen whether this will last.

The latest threat of a 155% tariff on China-built or -operated vessels entering the US, which was due to be implemented in mid-October, has seemingly been averted.

Outlook

The outlook for Q4 indicates higher volumes compared to the slow and subdued Q3. At the same time, we will continue see a gradual shift of cargo flows from China to Southeast Asian countries such as Vietnam and Thailand.

Given the fact that we are only looking at a one-year suspension, we can expect that shipping lines will continue with a redeployment strategy that would eliminate a large portion of the port call fees based on the initial restrictions set.

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