Sunny Worldwide Logistics Market Update: Navigating the "Shipping Rush" Amidst US-China Tariff Adjustments

Recent significant reductions in US-China tariffs, coupled with a 90-day "tariff window" and the traditional peak season for containerized shipping, are heralding what Sunny Worldwide Logistics anticipates will be a new "shipping rush" for enterprises exporting to the US market. This surge is expected due to adjustments in shipping capacity and a sharp increase in cargo volume.

The preceding tariff war had prompted many shipping lines to suspend certain US routes to maintain freight rates, diverting container ship capacity to European and other trade lanes. Sunny Worldwide Logistics notes that this strategic shift is now likely to further exacerbate the impending supply-demand imbalance.

Evidence of this trend is already emerging. One freight forwarding manager reported that on May 12th, the day the mutual tariff reductions were announced, booking inquiries and confirmed orders surged to 3-4 times recent levels. The substantial tariff decrease has spurred a wave of urgent booking activity among Chinese exporters.

The sentiment is clear: "Demand is high, but vessel supply is low." Furthermore, with a high probability of US businesses looking to stockpile inventory, export volumes are projected to increase rapidly in the short term.

"Consequently, space will be extremely tight shortly," the manager added. Leaders from numerous other freight forwarding companies have also confirmed that, starting this week, everyone is scrambling to ship goods, creating intense market pressure, with US-bound services already nearing full capacity.

According to international media outlet Loadstar, shipping consultancy Linerlytica has indicated that following the US-China agreement to lower tariffs, ocean carriers are expecting an early onset of the peak season for trans-Pacific eastbound trade. In anticipation, they have already announced surcharges ranging from $1,000 to $2,000 per 40-foot container (FEU).

While US Federal Maritime Commission (FMC) regulations stipulate that carriers must announce price changes 30 days prior to their effective date, some shipping lines proceeded with General Rate Increases (GRIs) for trans-Pacific eastbound cargo as early as May 15th. Specifically:

• ONE (Ocean Network Express) announced a GRI of $1,000/FEU.

• CMA CGM, Yang Ming, and ZIM implemented GRIs of $2,000/FEU.

• COSCO, HMM, Hapag-Lloyd, and Evergreen introduced GRIs of $3,000/FEU on May 15th.

All seven of these carriers are also slated to implement an identical GRI on June 1st. Sunny Worldwide Logistics advises clients to consult directly with their respective carriers for precise details on these freight adjustments.

Linerlytica further commented, "Since May 1st, US West Coast spot rates have largely held steady around $2,400 per 40-foot container. However, these are projected to soar above $3,000 in the coming weeks, and could climb even higher after June if demand proves to be robust."

Data released by the Shanghai Shipping Exchange on May 9th already showed resilience in US route freight rates due to carrier capacity management, with US West Coast and US East Coast rates increasing by 3.3% and 1.6% respectively compared to the previous period.

As subsequent shipping demand is unleashed, further increases in US market freight rates are expected to become more pronounced.

However, Sunny Worldwide Logistics also cautions that the remaining 30% tariffs may still exert pressure on the profit margins of many export enterprises. Therefore, the actual scale of this "shipping rush" warrants close observation.

A Special Advisory from Sunny Worldwide Logistics:

To our valued clients, shippers, and fellow freight forwarders with upcoming shipment plans to the United States: Sunny Worldwide Logistics strongly advises proactive communication with shipping lines, customers, and all stakeholders.

Early planning and booking are crucial to mitigate potential disruptions to your shipments during this volatile period.

Please share this important update. Sunny Worldwide Logistics is here to assist you in navigating these challenging market conditions and securing your supply chain.