The bellwether Shanghai Containerized Freight Index (SCFI), which records container spot rates from China to the major tradelanes of the world, will end 2019 on a par with last year – but, as usual, the narrative surrounding how that has been achieved is much more complex.
Global container growth has slowed dramatically, with some analysts predicting expansion for the year of just 1% to 2%, compared with the 4% of 2018.
A lacklustre peak season, spooked by the US-China trade war and a softening European market, confirmed the worst-case scenario for carriers’ growth predictions, resulting in the lines announcing a raft of radical blanking programmes around the Chinese Golden Week factory shutdowns, which succeeded in steadying the ship.
Source: The Loadstar
The U.S. House of Representatives passed the new trade agreement between U.S., Mexico, and Canada (USMCA) on December 19. The agreement is expected to be ratified by the Senate in 2020.
The USMCA replaces the 25-year old North American Free Trade Agreement (NAFTA), with several changes.
One of the most significant changes for the automotive sector is the update of country of origin rules. Automobiles must have 75 percent of their components manufactured in Mexico, the U.S., or Canada to qualify for zero tariffs, up from 62.5 percent under NAFTA.
Source: The Maritime Executive
The suspension by the US of the planned 15% tariffs on $160bn of Chinese imports and the halving to 7.5% of the existing duty on $112bn of other goods has come too late to rescue transpacific volumes this year and next, according to Alphaliner.
Moreover, the price paid by American industry caught in the crosshairs of the US-China trade war is substantial, according to a respected US business news commentator.
Alphaliner said that details of the Phase One trade deal struck by the US and Chinese negotiators on 13 December – just two days before the new tariffs covering an extensive range of everyday consumer goods were due to be implemented – were “still sketchy”.
Source: The Loadstar
2019 is not going to go down in history as a year anyone in air freight will particularly want to remember.
It started with some optimism – IATA forecasting 3.7% growth; although after a flat November 2018, it did acknowledge that “downside risks are mounting”.
The optimism didn’t last. In March, IATA downgraded its forecast to 2% – and in June it reassessed, suggesting 0% was more likely.
Source: The Loadstar
