Drewry warns: Trump's re-election is 'destructive' for container shipping

The biggest players in the container freight industry are foreign-owned, but the approaching US presidential election on 5 November could have significant implications for the future of ocean carriers and their loading and unloading locations.

A recent analysis by Drewry suggests that a victory by Republican presidential candidate Donald Trump "poses more disruption risk to the container freight market, based on past performance." The consultancy notes that an escalation of the trade war under a second term of Trump is much more likely.


Photos: Dreamstime.

If elected on 5 November, Trump is expected to impose universal tariffs of 20 per cent on all US imports, while goods from China could be taxed as much as 60 per cent. Simon Heaney, senior manager of container research at Drewry, argues that "such levies will ultimately be paid by US consumers, which will inevitably reduce overall demand for container imports, especially from China."

Freight rates may rise again after an earlier increase in 2024. Data from Xeneta's Shipping Index show that average spot freight prices from China to the US West Coast doubled from $1,340 per 40-foot container on 29 June 2018-short before former President Trump's introduction of tariffs in July that year-to $2,692 per container on 1 November. Although these prices fell again to $1,679 per container on 2 January 2019, they were still 25 per cent higher than prices at the end of June.

Source: Sourcing Journal