Is there a shortage of container space on U.S. routes? Industry insiders attribute it to the previous capacity reduction, expecting a lag in the change of port arrivals

With significant tariff reductions between China and the US coinciding with the peak season for container shipping orders, industry insiders anticipate a surge in shipping demand in the US-bound container shipping market, driven by capacity adjustments and an increase in cargo volume.

This development may have contributed to a significant rally in the A-share shipping sector today. By the close of trading, the share prices of Guohang Yuanyang (833171.BJ) and China Light & Power (872351.BJ) surged by 23.54% and 17.74%, respectively. Ningbo Maritime (600798.SH), Ningbo Ocean (601022.SH), Haitong Development (603162.SH), and Phoenix Shipping (000520.SZ) all hit their daily upper limits. The SCFIS(Europe) futures contract EC2508 also saw a notable increase of 12.38%.

However, the head of the US-bound business at a freight forwarding company told Cailian Press, "Unless shippers have inventory on hand, goods need to be produced before they can be exported. Therefore, there will be a lag in the shipping market's response, and changes in cargo volume may only be evident after a week. Additionally, the previous reduction in US-bound capacity by liner companies has led to tight space availability, resulting in a persistent 'overbooked' market situation. Whether cargo shipments will increase further in the future depends on the extent to which liner companies increase their capacity."

In terms of spot freight rates, for the Shanghai-Los Angeles route, pricing information provided by Jiyu Technology indicates that as of May 13, Maersk's quotes for voyages departing on May 20 and May 26 were $2,070/FEU and $2,020/FEU, respectively, representing an increase from the quotes of $1,945/FEU and $1,865/FEU on the previous Friday. Similarly, Maersk's quote for the Shanghai-Rotterdam route departing on May 22 also rose from $1,490/FEU as of last Friday to $1,536/FEU today.

Regarding future freight rate trends, an industry analyst told Cailian Press that for the European route, influenced by previous hefty tariff policies, the significant reduction in US-bound cargo volume led liner companies to cut capacity on the US route and reallocate it to the European route. With relatively stable demand on the European route, the increase in capacity disrupted the supply-demand balance, negatively impacting freight rates. As liner companies resume operations on the US route and reallocate capacity back from the European route, it will alleviate the pressure of excess capacity on the European route, thereby boosting freight rates.

For the US route, Wu Jialu, head of the Industrial and Cyclical Group at CITIC Futures Research Institute, stated that the short-term market may focus on the restocking effect on the US route, driving a surge in export transactions.

The aforementioned industry analyst further noted that during the tariff exemption period, combined with the peak order season for the US route from June to August, there is an expectation of a rebound in demand on the US route, which will drive up freight rates. However, considering that a 30% tariff will still suppress the profits of many export enterprises, it is necessary to monitor the actual scale of the shipping surge.

In addition to the container shipping market, the air cargo market is also seeing a turnaround. On May 12 local time, the US White House official website issued an executive order to amend the ad valorem tariff rate for small packages valued at less than $800, reducing it from 120% to 54%.

The head of an air freight forwarding company told Cailian Press that currently, many e-commerce companies dealing with FBA cargo have stockpiled a certain amount of small packages, fearing a surge in freight rates and eager to ship them out. Meanwhile, the three major domestic airlines have raised freight rates for their existing flights (low-density US-bound flights in the first half of the month) and are preparing for the resumption of US-bound flights. However, the resumption of flights and the confirmation and production of large-scale trade orders still take time. Overall, it is highly likely that US-bound air freight rates will increase, but the US policy of canceling T86 remains unchanged, and cross-border e-commerce logistics still faces challenges.