It seems incredible that carriers on the transpacific trade could be pushing to increase ocean freight rates next month after the dramatic decline of shipments moving from China to the US.

However, they have announced increases and are seemingly gambling on successful trade talks between China and the US in the days ahead.

While capacity has been cut dramatically through numerous blanked voyages, it is more easy to understand why current volumes would lead to a reduction in rates.

Tariffs still remain at 145% westbound and 125% eastbound, and only a significant reduction in those rates will lead to volumes starting to return.

As things stand, China has this week denied that they have started talks with the US government to resolve the trade war. A Chinese Foreign Ministry spokesman said “Let me make it clear one more time that China and the U.S. are not engaged in any consultation or negotiation on tariffs.”

While Trump’s Secretary of Agriculture later stated “According to our team in Washington, the conversations [with China] are ongoing regarding multiples of the trade goods that are coming out and going in.”

Naturally, we’re hoping common sense prevails and the trade war is resolved as soon as possible, but whether that is in time for the market to swallow a May increase very much remains to be seen.

If you have any questions regarding the above, then Westbound are here to help. So, please do not hesitate to contact us.