US President-elect Donald Trump has proposed sweeping tariffs, including a 25% duty on all imports from Mexico and Canada and an additional 10% tariff on Chinese goods. The measures, aimed at curbing illegal drug trade and addressing border security, have sparked widespread concern across industries.
Key sectors now face significant challenges, with over $200 billion in annual imports from Mexico and Canada set to become more expensive. Rising costs could inflate vehicle prices and suppress demand, adding pressure to an already fragile market.
Shippers hoping to front-load imports before the 20th Jan implementation face an uphill battle, with limited time to move goods, especially from Asia. The news has temporarily buoyed transpacific freight rates, supporting proposed general rate increases (GRIs) from major carriers for December.
Canada and Mexico are likely to contest the tariffs, as they conflict with the US-Mexico-Canada Agreement (USMCA). Domestically, industry groups are preparing to lobby against the measures, warning of their impact on consumers and commerce.
The proposed tariffs introduce new uncertainties for supply chains. While implementation remains unclear, businesses should stay alert and explore contingency plans to mitigate potential disruptions.
Let our expertise in freight forwarding help you navigate these challenging times efficiently.
Spot container freight rates increased 4% to $864 per 40ft container in the past fortnight
Shipping companies are trying to raise the prices for moving goods in containers, especially on routes between Asia and Europe. While some small price increases have happened recently, they’re still far below what these companies wanted.
The companies plan to try again soon to charge even more, starting in December. However, demand for shipping is low right now (since it’s a slow season), and the companies haven’t reduced the number of ships available. This might make it hard for the price increases to stick. Even with the challenges, shipping prices are still much higher than they were a year ago.
Asia-Europe Spot Rates: Rates have increased by over US $1000 from November to December. The spike is due to pre-Christmas movements, but demand for shipping is low, which might make it hard for the price increases to stick into the new year.
Market Resilience: Asia-Europe lanes are performing better than the Asia-US West Coast trade, supported by steadier demand and tighter capacity control. However, ongoing attempts by carriers to introduce higher Freight All Kinds (FAK) rates have seen limited success.
Capacity Adjustments: Carriers are increasingly cancelling sailings on Asia-Europe routes to stabilise rates, with around 23% of scheduled westbound departures cancelled in the coming weeks.
Contract Negotiations: Annual Asia-Europe contract talks are delayed, with many shippers waiting until after Chinese New Year in late January to finalise terms. Early agreements have seen rate increases, though still below spot levels.
What this means for shippers:
Capacity reductions may cause disruptions and potential rate volatility in the coming months. Forward planning will be crucial as the market navigates through the post-Chinese New Year period and new contract negotiations.
At Unsworth, we’re committed to helping you adapt to these market shifts with tailored solutions to optimise your supply chain. Reach out to our team for expert advice.
Indian port strike looms as dockworkers demand action
Indian shippers are bracing for potential supply chain disruptions as dockworkers plan indefinite strikes at major ports starting 17 December, citing unmet government promises on wages and pensions.
Unions accuse the Indian Ports Association (IPA) of failing to implement wage and pension agreements reached during August negotiations. Approval of a long-delayed productivity-linked reward (PLR) scheme, retroactive to 2021, and wage revisions stalled by government delays. Indian exports, which saw a 17% growth in October, could face setbacks if strikes disrupt port operations. Shippers are urged to monitor developments closely.
Panama Canal explores land bridge solution amid rising water levels and drought concerns
Rising water levels have allowed transits to resume through the Panama Canal, but the Canal Authority is also exploring a land bridge option to increase cargo capacity. This idea, aimed at moving containers overland, could add 5 million containers per year by 2045, addressing potential drought disruptions and improving transit for ultra-large container vessels (ULCVs).
However, shipping lines remain skeptical of the land bridge. Maersk was the only major carrier to use the land bridge between January and May, rerouting containers through Panama for faster access to US East Coast ports. Yet, the additional $2,000 cost per container and logistical challenges make it less appealing for other carriers.
Industry experts argue that while the land bridge may be viable in certain circumstances (e.g., canal closures), its economics don't match the efficiency of traditional shipping.
In addition, the Panama Canal Authority is planning a $1.6bn reservoir and dam project to improve water supply and support the canal's long-term capacity.
Air Freight
Q4 sees strong but stable performance
Forward planning by shippers has contributed to a busy but controlled Q4 for the air cargo market. Spot rates are climbing steadily but not at the dramatic pace typically seen in peak season. Rates are significantly higher than last year, with notable trends emerging:
Europe-Americas: Spot rates jumped 10% last week to $2.71/kg, up 23% from last year. Europe-US rates rose 48% over five weeks, driven by reduced capacity and Thanksgiving demand.
Asia Pacific: Stable overall, with modest rate increases to Europe and declines to the US.
Improved collaboration among shippers, forwarders, and airlines has kept the market organised, avoiding the chaos seen last year. Rates remain 20–25% higher year-on-year, with this strength expected to carry into Q1 2025.
Potential challenges in January, such as a possible US port strike, trade tariffs, and Chinese New Year, could still create volatility. However, industry players seem well-prepared for these uncertainties.
Contact us today to explore our air freight solutions to ensure your cargo reaches its destination efficiently and cost-effectively. Let’s navigate these changes together and keep your supply chain running smoothly.
Customs Compliance
Returned Goods Relief: Are you paying duty?
Returned Goods Relief (RGR) allows for the temporary import of goods without full duties or VAT if they are reexported within a specified period. This is particularly advantageous for goods involved in repairs or exhibitions, helping to save on associated costs.
Customs Warehousing provides a means to store goods duty-free until they are released for free circulation.
Inward Processing Relief (IPR) suspends duties and VAT on imported goods while they undergo processing or repair, with the goods then reexported, thus reducing the costs related to these operations.
Lastly, Returned Goods Relief (RGR) offers relief from import duties and VAT for goods returned to the UK or EU within a certain timeframe, preventing the need to pay these charges again on items coming back into the country.
How can we help?
Expert Advice: We provide guidance on the best reliefs and exemptions for your needs.
Application Support: We manage the application process for various reliefs.
Documentation: We ensure all customs paperwork is completed correctly.
Compliance: We help you stay compliant with customs regulations.
Our expertise allows us to provide tailored solutions that address the complexities of the market. As shipping companies show signs of flexibility in contract allocation coverage and equipment release, our team can navigate these changes effectively, ensuring smooth operations for our clients. Our strategic approach includes offering guidance that allows businesses to plan and adjust their logistics strategies accordingly.
We’re always looking for ways to power up global freight solutions. That’s why we’re excited to announce the expansion of our Airfreight team and the opening of our dedicated office.
As Unsworth reaches a significant milestone—50 years in the freight forwarding industry—we are thrilled to celebrate our legacy of excellence, innovation, and client satisfaction.
