We are seeing a rapid resumption of strong booking activity in North China after Golden Week. This is partly due to the accumulation of bookings during the week’s break, as well as shippers wanting to send cargoes out as early as possible. Concerns remain over expected increases of ocean freight pricing due to a potential strike on the U.S. East and Gulf Coasts. Additionally, U.S. importers are looking to keep their inventory levels high. We will likely continue to see strong booking activity persist throughout the remainder of 2024. Most factories typically close at least one week before the Lunar New Year holiday in China, which begins on 28 January 2025. Together with the anxieties about the potential for a significant increase in U.S. import tariffs, we will likely observe that export demand will boom until the mid-January 2025.

The potential of new U.S. tariffs and possible shift in trade flows are key topics of discussion among Chinese manufacturers, especially those who focus on exports to the U.S. as to when and how much of an import tariff would be imposed on imported commodities from China by the incoming administration. A number of manufacturers are signing 3-month contracts instead of a year-long contract with U.S. importers.

Some manufacturers have said that if the tariff increase is within 20%, they would still be able to manage by splitting the increases among the suppliers, the manufactures themselves, and the importers. In terms of timeline, the decline in shipping demand from China to the U.S. might not happen right after the Chinese Lunar New Year since it would take some time for the increased import tariff to be in effect. Should that occur, we expect it to start from April or May in 2025.