Ocean and air carriers are benefitting from massive increases in demand ahead of the traditional peak season, as US shippers try to deal with President Trump’s tariffs. The question is what impact (if any) this will have on the China-Europe trade lane.
Having previously blanked sailings due to anticipated low demand, the container shipping lines are enjoying rare pricing power, which is being propelled by three factors: US importers’ panic over tariffs; typhoons in Asia; and the lines recent reduction in capacity.
The result is not pretty. US importers, large and small, are struggling more than usual this peak season to get their cargo on vessels, because ships are overbooked by 110% and more, causing thousands of containers to be rolled weekly, with reliability down to 35%.
Much of the spike is due to importers moving shipments up, even if their merchandise is not specifically targeted by the tariffs, because of overall uncertainty in US trade policy today.
In addition to tight space on vessels leaving Asia, some equipment shortages are emerging, with 45’ containers in short supply.
Impact of early shipping on late peak season
Since no one is sure how much volume was shipped early this year, it is not certain what impact the early shipping will have for the back end of the Asia-US peak season from mid-September through October.
It is also uncertain if imports will decline significantly post October, as shipping line executives suggest there has been no inventory buildup this summer, which means volumes could remain strong into autumn.
October 1st is the beginning of Golden Week in Asia and is the catalyst for the traditional final peak as importers make a big push before factories close for the week.
There are no problems for UK importers shipping from China currently and while we do not anticipate any problems for our customers, our recommendation for shippers is to forward plan your supply chain and make your vessel booking as early as possible, so that you have a good margin to select your preferred carriers.