Forwarders remain ‘cautiously optimistic’ despite US-China trade rift

Cliff Xu, CEO of Greater China at Rhenus Air & Ocean, said the US-China route had gradually lost its prominence as industry took measures “to minimise risks in this trade lane”. Compared with a decade ago, “the US market has dropped to 14% of the total China export values”, said Mr Xu.

To reduce reliance on China, manufacturers have looked to its booming neighbours, which appear to be the answer to the more-than-half-a-decade-old trade drama, with APAC countries seeing a “25% increase annually in intra-Asia volumes”.“We are seeing more companies start to produce goods in APAC,” he said. “This means we could see a scenario where the volume out of China reduces, and an increase in volume from the South-east Asia and Pacific region to the US. This will prompt the carriers to adjust their routes and emphasis.

“For the long run, we expect to see a stable ocean freight situation, without the high volume seen in previous years, such as during the Covid period.”

In addition, the market is weighing “options such as free-trade zone and bonded warehousing solutions in the US to defer tariff payments until goods are ready for sale or distribution, especially on the LATAM market tradelane”.

With several options at hand, the industry remains “cautiously optimistic for the future development of the China-US tradelane,” added Mr Xu. A logistics manager in Shenzhen agreed, adding that most companies are “largely hopeful”, despite the current “mounting pressure”.

“The expectation of waking up to a new sanction or tariff is the new normal,” added the manager. “We’re hardly shocked anymore. We’ve seen pressure on the industry and we’re still feeling it. Price fluctuations and uncertainties have affected our operations.

“That said, I don’t think the US-China market will ever go down completely. It’s too big. Business is business, so we’re not overly worried about the trade tensions. But we’re still diversifying to mitigate risks, because you never know.”