We’re a little over 2 months into 2025 and it’s already been a rollercoaster ride! Here’s what’s been going on so far in the state of freight! Buckle up! It’s been a bumpy ride so far!
Tariffs on China Imports
Most imports from China and Hong Kong now carry at least a 20% Ad Valorum tariff on them. This is in addition to any previous tariffs placed on items. The small bit of good news is that tariffs do not have a compounding effect, so you are not paying tariffs on previous tariffs. They are just added together. There are a few exceptions to the new 20% tariffs. Charitable Donations and Informational Materials (which include books, publications, artworks, and news. BTW!) do not carry the tariff. Board games and card games didn’t have previous tariffs attached to them so most of GPI’s customers are only looking at the 20% tariff on their commercial invoice import value. If you don’t use GPI to ship your goods, please make sure you are using the proper HTS Codes to get through US customs. On top of the normal HTS Code for games (9504.90.60) you will also have to add the 20% Ad Valorum tariff HTS Code (9903.01.24). Can’ means we’re still seeing long transit times from HK to the UK/EU. Vessels are still sailing around the Cape of Good Hope in South Africa to avoid the area. The re-route adds about 10 days to each trip that could be avoided by using the Suez Canal. Unfortunately, it’s still not safe to sail through the shortcut and there is no forecast to reopen the route in the near future. UK ports have been operating normally but at extremely high volumes which is causing an increase of wait times once the vessels arrive. Plan for delays. If you can’t get enough of tariff talk, check out Mike’s blog titled: Tariff Update: Indecision May or May Not Be The Problem
The Panama Canal
Although water levels are still not ideal, about 32 vessels per day are passing through the Panama Canal. Reservations to pass through the canal are highly encouraged. If no reservation is made, wait times are about 2.5 hours, but could be longer depending on volume of arrivals. It takes about 8 to 10 hours to pass through the Panama Canal. A new surcharge has also been put into immediate effect this week. Importers and Exporters will now see an additional $80 surcharge for passing through.
China/Hong Kong Ports
China and Hong Kong ports are running smoothly with little congestion. Volumes are nearly at pre-CNY volumes again and are expected to climb as US importers front load goods during the current trade market instability. We’re not experiencing many blank sailings or rolling schedules and ocean freight rates are dropping as peak shipping season draws to a close. March General Rate Increases on freight have been cancelled.
Chinese Made Vessels
In the past 5 years, Chinese ship building has gained significant ground in container ship building, putting China at a shipping advantage. In an effort to limit or curb China’s dominance in containership building industry, the White House and United States Trade Representative are proposing steep fees for any Chinese made ships entering a US port. The fees would not only pertain to individual ships, but any carrier who happens to have Chinese made ships in their fleet. The US is woefully behind in this area with only 3 containerships currently under construction and 5 on order for the future. 30% of the world’s containerships fly under the China flag. The US doesn’t even register in the top 5. The USTR and White House are due to discuss the specifics of the fee proposal later this month, but a $1M fee per US port stop is anticipated. Unfortunately, importers and exporters will end up paying for these fees in the form of additional surcharges on goods. This is still all up in the air and we should learn more about this in the coming weeks.
US East Coast , Gulf Coast, West Coast Ports
Ocean ports on all coasts are seeing little to no wait times as vessels arrive. Savannah and Houston are seeing the highest wait times waiting 4 days until able to berth. Most US ports are seeing 0 – 2 days wait times.
US Rail
Rail dwell times are a little longer than we’d like to see. The longest rail dwells are found at LAX, LGB with a 10 day wait time and Baltimore with a 13 day wait time. If your using the rail to get to your destination, plan for a 2 week delay in your transit schedule.
I think that’s enough to digest for now. I’ll keep you updated on all the latest and greatest freight news in next months State of Freight. Enjoy your month!
