2018’s prolonged peak shipping season

Peak Season ShippingThis year we’re seeing an extended peak season for container imports for several reasons.

Normally around this time of year import volumes start to slow, and we back out of the traditional “Peak Season” for container shipping. But not this year. Peak import shipping season started in June and has not slowed down.

The main reason is the tariffs imposed on U.S. imports coming from China by the U.S. government.  Most importers front loaded their imports to stay ahead of paying additional duties. The increased tariffs started at 10 percent in August for some imports from China and will increase to 25 percent for $200 billion worth of imported goods from China on Jan. 1 2019.

Couple this with Chinese New Year, which starts Feb. 5, 2019. Many importers are now rushing to get product in before Chinese factories shut down for up to three weeks in early February. This is adding more volumes to an already over capacity system.

Top it off with the fact that steamship lines are trying to manage capacity by pulling vessels out of rotation to create less space and increase prices. They have been successful in keeping spot market rates high.

With peak season in more than full swing, when should we see relief? Perhaps we’ll see volumes drop late November or early December because some importers will want to avoid paying 25 percent tariff rates Jan. 1 and will simply stop shipping. If that happens spot market rates should drop some and maybe, we’ll all get a much-needed break from the stress of peak season shipping.

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