Carriers Reducing Capacity for Lunar New Year / Tariff Increase Planning

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Carriers Reducing Capacity for Lunar New Year / Tariff Increase Planning

Author: sales@jsconnor.com

17-Jan-19

Carriers Reducing Capacity for Lunar New Year / Tariff Increase Planning

Ocean Carriers in the Asia/U.S. trade have announced blank (cancelled) sailings anticipating reduced activity and as an effort to increase rates.

This has been a normal practice in recent years since demand reduces as factories close for the Chinese New Year celebrations. The announced reductions this year are slightly greater than the past. This seems to also be taking into consideration the fact that there was a marked increase in imports in the fourth quarter of 2018 to beat the possible increase in tariffs on goods from China. Some importers have been able to stockpile certain products to avoid paying the tariff increases.

As previously advised the tariff changes from 10% to 25% for $200 billion worth of goods from China has now been delayed to March 1st as negotiators continue to try to resolve differences and avoid this further increase by the U.S.

The tariff situation has definitely impacted supply chain planning for the last 6 months. How much first quarter imports might be reduced from this situation, plus the normal Chinese New Year impacts, is still the subject of speculation to some degree. If possible it would be prudent to make import bookings sooner rather than later to avoid possible delays. We will do our best to keep you advised of any significant changes in the market.