Trump Tariffs, Strikes & Early Lunar Near Year Creates Environment for Rate Surge

The global logistics and transportation market is undergoing significant transformation amid shifting economic conditions and political uncertainties. Rising consumer demand and e-commerce growth continue to drive expansion, yet supply chain challenges, labor shortages, and volatile fuel prices create headwinds. Additionally, potential tariffs and trade policies from a Trump administration could reshape international trade routes, impacting costs and operational strategies for companies reliant on cross-border logistics. As industry players prepare for possible policy changes, the focus remains on innovation and resilience, with an emphasis on leveraging data, automation, and sustainable practices to meet evolving market demands.

Sea Freight

Asia to North America

1. Impact of US Election and New Tariffs: With Trump winning the US election, potential new tariffs on Chinese goods are expected, driving a surge in frontloading as shippers aim to get goods into the US before any tariff changes take effect. This is anticipated to increase demand for shipments from China to the US East Coast (USEC) and West Coast (USWC) in November and December. 

1. Lunar New Year and Capacity Constraints: The early Lunar New Year in January is adding to the urgency for importers, further tightening available capacity, particularly on USEC routes where blank sailings are contributing to significant constraints. 

1. Blank Sailings and Rate Trends: The gap between rates to the USEC and USWC is widening, largely due to blank sailings on the USEC, while sailings to the USWC remain steadier. Vessels are fully booked, with carriers reporting strong utilization rates for November. 

Canadian Port Labor Action

1. Canada Port Shutdowns: Ports across Canada have suspended terminal operations due to labor actions, affecting both the West Coast and East Coast. Major carriers, including CN and CPKC, have paused intermodal shipments to Canadian West Coast ports. This situation may cause significant delays for shippers relying on Canadian ports for their supply chains. 

1. Diverted Shipments: Cargo is unlikely to divert through East Coast Canada, as Montreal’s terminals face their own disruptions affecting 40% of inbound volumes. Vessels may adjust their port destinations, prioritizing U.S. West Coast stops to wait out the BC lockout. 

1. Impact on North American Supply Chains: These shutdowns have caused carriers, such as CN and CPKC, to suspend intermodal shipments bound for key Canadian West

Europe to North America

Stable Trans-Atlantic Demand: Demand across Trans-Atlantic routes remains steady as Europe heads into the holiday season. Utilization levels are strong, with blank sailings in place to manage capacity.

Indian Subcontinent

Slight Rate Dip: Container space remains tight on routes from the US back to the Indian Subcontinent, particularly due to ongoing strike-related congestion on the USEC. Although some carriers are attempting a Peak Season Surcharge (PSS), acceptance remains limited due to market conditions.    

Asia to Europe

Congestion and Supply Constraints: Rates on Asia-to-Europe routes held steady due to ongoing port congestion in both Asia and Europe. Carriers are closely managing supply through blank sailings, which has kept utilization high. 

Air Freight

Asia to North America/Europe

Elevated Rates and Capacity Management*: Air cargo rates remain elevated, with capacity carefully managed by carriers. Demand is expected to pick up through November, especially with US importers increasing shipments ahead of potential tariff changes and the upcoming holiday season.

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– The CargoTrans Team

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