The carefree summer vibe we all need right now, following months of freight market uncertainty? It’s solidly in our rearview. Retailers are forecasting surges at our U.S. ports this summer, and shippers should be prepared for the short-term impacts—even with a U.S.-China trade deal potentially in place.
Journalist Stuart Curtis writes for Freightwaves, “As retailers brace for the peak back-to-school and fall-winter holiday seasons, there is a pronounced surge in imports driven by a temporary reduction in tariffs on goods from China. Many retailers who halted or reduced orders due to tariffs rising to 145% are now resuming imports following a reduction to 30% and a 90-day tariff pause.”
As we learned during Covid, getting freight out of ports and returning empty containers can be incredibly challenging when the freight market is severely disrupted, and I see that same scenario unfolding this summer — especially when it comes to import drayage entering the Port of Los Angeles.
The bottom line on…your bottom line
Unless you’re fully locked in on contract rates, be prepared to white-knuckle added shipping costs for a few months. As drayage capacity tightens and warehouses struggle to meet freight unloading demand, spot quotes can rise.
These challenges will mean delays in returning empties, ultimately resulting in extra chassis fees, accessorial charges, and yard storage costs.
How short is this short-term pain, exactly?
That remains to be seen.
Retailers aren’t chancing August, September, or October orders with the U.S.-China trade deal still up in the air. Rather, they’re racing to get orders onto U.S. soil before the tariff pause expires on August 10 for Chinese imports (and July 9 for others), and opting to pay for a few extra months of warehouse storage.
If the deal holds, I expect volumes to drop in the fall. (Emphasis on “if.”)
The hot tip that could help you cut costs
Okay, for the sake of argument, let’s say the trade deal is finalized. What if you can’t get your load into the country in time for The Great Tariff Unpausing?
Bonded warehouses are your workaround.
Get your load in-country, but delay or skip temporary tariffs by taking ownership of your freight at a later date.
Could you have more time?
Maaaaaybe.
It appears U.S. officials are seeking to extend the existing tariffs on China for 90 days beyond the agreed upon August 10 deadline.
Okay, so where do things stand on U.S. – China trade negotiations?
Both sides have reached a handshake agreement on the framework, but the details are about as clear as mud. (August 10 has been set as the deadline for a deal, so stay tuned.)
My advice? Don’t cap that bottle of Mylanta quite yet.
According to Reuters, “Trump on Wednesday said he was very happy with the trade deal. ‘Our deal with China is done, subject to final approval with President Xi and me,’ Trump said on Truth Social. ‘Full magnets, and any necessary rare earths, will be supplied, up front, by China. Likewise, we will provide to China what was agreed to, including Chinese students using our colleges and universities (which has always been good with me!). We are getting a total of 55% tariffs, China is getting 10%.’
“Still, specifics of the latest deal and details on how it will be implemented remain unclear.”
As of today, no new details on progress toward a final deal have emerged. (And, as anyone who works in logistics knows, the devil is in the details.)
What’s more, a stumbling block has bubbled up—export restrictions related to rare earth minerals could threaten the agreement.
As journalists Jeff Mason, Alistair Smout, and Doina Chiacu report for Reuters piece, “‘The two sides left Geneva with fundamentally different views of the terms of that agreement and needed to be more specific on required actions,’ said Josh Lipsky, senior director of the Atlantic Council’s GeoEconomics Center in Washington.”
In short, we’re swimming in a sea of uncertainty. Make sure you have seasoned logistics partners who can offer the cost- and sanity-saving strategies that help keep your head above water.
Have questions? Want to chat strategy? Let’s connect.