Importers have definitely begun carrying out contingency plans to get ahead of an anticipated 25% tariff implementation on goods arriving January 1, 2019 and later.  These plans include pushing manufacturers to produce early, moving sourcing, changing to first ports of call vessel strings.

There have been three rounds thus far; however we have not seen progress in trade talks with China.  The MOFCOM (Chinese Ministry of Commerce) has announced 5% to 10% tariff increases in response to the third round of Section 301 tariffs.

The carriers continue to lease charters for vessels at a lower rate.  We presume that there may be a potential larger slack season based on importers stock piling cargo prior to the January 1 target.  There is potential for more blank sailings and less capacity than in years past.  We will need to keep a careful eye on this up through Chinese New Year.

As the inventory levels spike in US, there is a concern that that will create a domestic warehousing shortage in the beginning in the first quarter of 2019.

As always, please reach out to your logistics professional at Global to help plan and execute your supply chain.

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