Dive Brief:
- The cost of shipping from China to the West Coast has been slipping steadily since the beginning of August and rates to the East Coast have been on the decline since mid-July, according to Freightos data.
- Rates from China to the East Coast are down almost 32% since the same time last year, and rates from China to the West Coast are down nearly 36%.
- "While this is good news for importers, peak season prospects are looking increasingly dim for carriers," Freightos Chief Marketing Officer Ethan Buchman said in a press statement. "Luckily for them, many have been focused on underlying efficiency improvement recently, driving more bottom-line profitability."
Dive Insight:
The trade war was heating up this time last year and capacity was low as a result of increased demand as shippers looked to bring in goods ahead of the holiday season to beat the levies. But demand was down this August because many August orders were brought forward early "by what turned out to be justified tariff fears," according to Buchman.
The Ports of Los Angeles and Oakland saw year-over-year (YoY) increases in loaded import container volume in July at nearly 9% and more than 7%, respectively. These increases were nearly offset, though, by YoY volume drops at the Port of Long Beach and The Northwest Seaport Alliance, which were down almost 10% and about 6%, respectively.
Volume was virtually flat YoY, showing just 0.24% growth, when the volume of these four West Coast ports is taken as a whole.
While the Port of Los Angeles had its busiest July ever in terms of import numbers, its exports were down 4% YoY. This is happening alongside a "high level of uncertainty driven by trade tensions," Port of Los Angeles Executive Director Gene Seroka said in a statement.
The latest list four tariffs won't go into effect until next week and are expected to hit more consumer items. In early August, Hackett Associates Founder Ben Hackett said the administration's tariff policies were continuing to rile markets. This remains the case as markets dropped sharply last week when President Trump moved to escalate the trade war with China. Markets did bounce back slightly after Trump showed a more upbeat tone following the recent G7 meeting.
"Our overall outlook is more pessimistic than last month, underlining that trade wars are not harbingers of good things to come," Hackett said in a statement earlier this month.
