Trade demand will plunge if 25 percent tariffs extended to all Chinese goods and those are bad news for a freight market
“The Trump administration is considering levying tariffs on the remaining $300 billion of Chinese exports to the United States so far unaffected by duties. Freight Intel, FreightWaves’ proprietary research group, has just published a study warning that such a move would disrupt trade flows far beyond what has occurred so far.”- According to the article in freightwaves.com and its author John Paul Hampstead
“In the event of a 25 percent tariff, air cargo demand should remain normal until about 30 days before the deadline, when a significant ramp-up occurs. If ocean capacity on the Transpacific sells out, air cargo could tighten sooner.
Intermodal capacity is already very loose; the trains are hauling fewer carloads and are running at higher velocities. Importers pulling freight forward to avoid a 25 percent tariff will need that capacity to find affordable warehousing space in the interior of the country.” – Hampstead also wrote in his article.
In our opinion, it will also negatively impact the truckload rates and capacity, which are already very low.
Read the full story HERE
Source and credits freightwaves.com / John Paul Hampstead, Associate Editor