Uncertain. Chaotic. Fluid. Confusing. Expensive.
All words to describe the supply chain and shipping this year. Tariffs are the number one unknown and the one thing that can make or break your profit margin. With constant changes to the tariff pricing and dates, many are left confused and in the dark about what they will be paying once their goods arrive in the US. Peak season shipping, usually starting in July, got a jump start this year as shippers rushed to get their goods cleared through US customs prior to the July 9th tariff deadline. This caused container prices to rise and vessel space to be in high demand. Just 2 days before the July 9th deadline, the Trump administration decided to extend the tariff deadline to August 1. The only country not on the August 1 deadline is China. That tariff deadline is August 11. What happens when these dates hit? Your tariff percentage changes, but to what is currently unknown. The administration says if specific country deals aren’t made, the tariff percentage reverts back to the reciprocal percentage list from the April “Liberation Day”. This is a wait-and-see situation as no deals have been signed just yet. The situation changes daily, so we’ll have to wait to see what’s happening in August.
On the positive side, container prices are holding steady. Most importers have shipped and produced earlier than usual to beat the tariffs. Now that July is here, demand for containers and vessel space is at a constant, but not rising. This means GRI’s and Peak Season Surcharges are not likely to go into effect, or if they do, will not be as expensive as a typical peak shipping season. Let’s take a look at what’s happening at the US ports.
US WEST COAST
There are no lines and no waiting at the West Coast ports, and vessels are smoothly unloading and moving on. This includes LAX / LGB, Oakland, and Seattle. Canada’s West Coast ports are experiencing the same. You’re looking at a week delay in your transit timeline if your goods have to board the train to get to where they are going. There’s about a 5-day wait until your goods keep moving on.
US EAST COAST
The conditions on the East Coast and in the Gulf are looking about the same as the West Coast. No lines and no waiting for the most part. Slight congestion buildup is happening at Baltimore and Norfolk ports, causing a 6 -8 day wait before vessels unload, but the rest of the East and Gulf Coast is moving right along. East coast trains have a 2-day wait before your goods start moving.
AIR FREIGHT
Last month was a rush to get goods into the US, and air freight rates were running high. Now that there’s a little bit of an extension to the tariff deadlines, we should start to see pricing come down a little bit. Keep in mind, this is still air freight, so pricing still remains high.
DATES TO CLEAR US CUSTOMS
AUGUST 1 – Rest of the World countries’ reciprocal tariff rates change. Get your goods cleared by July 31.
AUGUST 12 – China reciprocal tariff rates change. Get your goods cleared by August 11.
