The result of the ongoing trade talks between China and the US, seems doubtful that the levels of frontloading seen at the end of 2018 will continue into 2019, according to BIMCO. Were the negotiations to fail, it would increase the possibility of tariffs to be increased in March, affecting the container shipping industry.
Mainly, for the time being 27.49 million tonnes of US containerized imports are being affected by the tariffs. The number reflects the 14.2% of the container imports that are transmitted to the West Coast, based on data for the full year of 2017 and BIMCO’s own estimates.
The possibility of future decrease concerning imports by the US West Coast, particularly, will negatively affect the container shipping industry as the majority of the tariffed Chinese products are discharged in the West Coast, as reported by BIMCO.
This is because the volume of containers will be decreased on the fronthaul leg of the transpacific trade lane.
The fronthaul volumes are the capacity setters as they are much higher than those on the backhaul leg. Any lowering of volumes on the trade lane from the Far East to the US will reduce the shipping capacity needed.
Container imports on both the US East Coast (USEC) and West Coast (USWC) had a strong year in 2018, growing 3.7% and 8% respectively in the first 11 months of the year compared to the same period in 2017.
