Shipping rates from China to the U.S. neared all-time highs this week – the shipping cost for a 40-foot container from Shanghai to LA is close to $10,000—representing a 229% increase from one year ago. Globally, a composite index of 8 major trade routes saw a 333% increase from one year ago. Rates are expected to increase.
These higher rates, while beneficial for container shipping lines, are putting pressure on importers in terms of higher costs. Higher costs uneasily absorbed by importers will likely be reflected in higher retail prices, which could result in inflation. Additionally, supply chain constraints due to COVID still hinder economic growth.
Interested in learning more? Read the full article on American Journal of Transportation here.
At 12:01 AM Eastern time Friday, the United States plans to increase tariffs from 10% to 25% on Chinese imports. Trump and Beijing plan to talk prior to the tariff hike sometime today. China has stated they will retaliate if the tariff hike goes through.
If the tariff increase goes through, both the U.S. and China's imports and exports will likely be affected by both the tariff hike and retaliatory measures that may be taken on either side.
Read more here.
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