[Source/Observer Network Chen Sijia] From May 10 to 11, the high-level economic and trade talks between China and the United States were held in Geneva, Switzerland. Both sides agreed to suspend tariff measures within 90 days. According to a report by the Hong Kong South China Morning Post on May 13, analysts predict that as companies rush to take advantage of this window period to transport goods, the volume of containers shipped from China to the U.S. West Coast is expected to surge sharply in the coming weeks.

The liner shipping information company Linerlytica stated in a report released on May 12 that the easing of trade tensions came earlier than many people expected, which will drive a sharp increase in trans-Pacific freight volumes over the next three months. As the rebound in freight volume coincides with the traditional summer shopping season in the U.S., shipping costs are expected to soar soon.

Reportedly, carriers have already announced that they will impose a trans-Pacific peak-season surcharge of $1,000 to $2,000 per 40-foot equivalent unit (FEU), starting as early as May 15. This means that the FEU freight rate for shipments to the U.S. West Coast will rise above $3,500.

Lars Jensen, founder of shipping company Vespucci Maritime, said that due to many companies having accumulated large amounts of cargo, shipping demand is expected to grow significantly. He pointed out that the 90-day suspension period will end in the middle of the U.S. summer shopping season, so U.S. importers may seize the opportunity to stock up on more goods in the coming months.

Under the impact of the Trump administration's tariff policies, cargo volumes at U.S. ports have plummeted recently. However, Jensen warned that in three to six weeks, the surge in cargo volumes could lead to "congestion" at U.S. ports.

Local time on May 9, Port of Los Angeles, California, Visual China

America’s CNBC also cited industry insiders saying that during the 90-day tariff suspension, many American companies will quickly resume importing Chinese goods. Paul Brashier, vice president of logistics company ITS Logistics, said: “I have some customers who have preloaded thousands of containers in China, ready to restock.”

Rick Muskat, president of U.S. footwear retailer Deer Stags, said that after the reduction in tariffs, Chinese suppliers can resume shipments, but the sharply increased shipping demand will also lead to higher freight rates. “Our costs will rise by nearly 40%, so we will have to raise prices for autumn deliveries,” he added.

Eric Byer, CEO of the American Chemistry Council, revealed that the tariff war has harmed America's chemical supply chain, with many companies facing the risk of insufficient inventory. “I suspect we will see a very active wave of orders, possibly resulting in a shortage of vessels to meet demand,” he said.

Gene Seroka, executive director of the Port of Los Angeles in California, said: “The 90-day suspension of tariff measures by the U.S. and China is good news for consumers, American businesses, workers, and supply chains.” He hopes that both sides can work together to reach a long-term agreement to avoid trade disruptions and uncertainties.

Danish shipping giant Maersk Group said on May 12 that they are working to assist customers in taking full advantage of the 90-day window. The company said in a statement: “The agreement between China and the U.S. is a step in the right direction, and we hope it can lay the foundation for a long-term agreement among all parties, creating the long-term predictability our customers need.”

In addition, the South China Morning Post pointed out that as vessel capacity returns to trans-Pacific routes, other routes heading to destinations outside the U.S. are also expected to benefit. As of noon on May 13, the container freight index futures contracts for shipments from Shanghai to European ports in June and August rose by 7.86% and 12.79%, respectively.

This article is an exclusive contribution by Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7503861344337166848/

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