Monday, May 13, 2019

Analysts Shy Away as Trump Threats Cause Uncertainty in the Ocean Container Freight Shipping Sector

Chinese Volumes Up as Tariff Hikes Cloud the Picture for US Ports
Shipping News Feature
US – Shipping analysts are keeping low profiles at the moment in the face of uncertainty as the President's latest pronouncements cause more confusion. The Trump factor is cited in the latest set of figures from the Port of Oakland which reported on Friday last that its container import freight volume jumped 7% last month compared to April 2018, making it the busiest April in the Port's 92-year history.

Oakland tells us that import totals have increased in three of the first four months of 2019 adding that export volume also edged up 1.7% last month. However these Oakland’s trade numbers predated US warnings of increased tariffs on Chinese goods that were due in any time. The Trump Administration has threatened to boost tariffs on $200 billion of Chinese imports from 10% to 25% and these could be in effect by the time you read this.

Oakland points out that, as with so many ports globally, China is its largest, and most influential, trading partner. Fear is that tariff hikes could dampen import demand while also prompting retaliatory levies on US exports. Port of Oakland Maritime Director John Driscoll, observed:

“We entered this year with uncertainty over the trade outlook, so we’re gratified by the solid performance of import cargo. At the same time, all of us involved in global trade are concerned about what comes next.”

The Port said that Oakland import volume has increased 5.8% through the first four months of 2019 and attributed the gains primarily to continued strong US consumer demand. Oakland’s total cargo volume, imports, exports and empty containers, is up 4.6% so far this year. The number of ships calling at Oakland in 2019 has declined 8.1% as shipping lines consolidate more cargo on fewer but larger ships to cut costs.

The President has already authorised tax rises on some items and the proposed tariff increases would mean all of the toys and sports equipment imported from China to the US, as well as 93% of the footwear and 91% of textiles and clothing, would attract up to 25% extra taxes on importation.