Good day,
Early this morning, an additional $200B of tariffs on imported Chinese goods went into effect, and China canceled trade talks that were scheduled to take place later this week. This latest round of tariffs is set at a rate of 10%, but will increase to 25% on January 1, 2019.
A week ago, the Trump administration clarified its thinking on the Chinese trade war in an official statement: “After a thorough study, the USTR concluded that China is engaged in numerous unfair policies and practices relating to United States technology and intellectual property – such as forcing United States companies to transfer technology to Chinese counterparts. These practices plainly constitute a grave threat to the long-term health and prosperity of the United States economy.”
Did you know?
Hurricane Florence dumped an estimated 8 trillion gallons of water on the North Carolina coast; outbound freight volumes from Wilmington dropped 67%.
Quotable:
“The Ubers and Lyfts didn’t pop out of nowhere; they popped out because there was a demand for their services. If they waited for us to regulate them, they still probably wouldn’t be in business. As transportation officials, we need to either be visionaries or get out of the way.”
-Jennifer Cohan, Delaware Department of Transportation Secretary
In other news:
The 4PL era begins
A 4PL manages all of supply chain operations, including carriers, warehouses, reverse logistics and more, breaking down silos and providing end-to-end visibility and transparency. 3PLs often acquire other 3PLs that have different capabilities—distribution, warehouse, reverse logistics—and naturally expand into 4PLs. (Supply Chain Dive)
Tariffs yet to hit Asian air cargo but concerns remain
Airlines recorded “firm” growth in cargo volumes in August with no signs that the imposition of tariffs is having an impact on demand so far. (Air Cargo News)
Germany’s commercial shipping fleet shrinks by a third
Germany, one of the world’s main maritime players, saw its commercial fleet shrink by a third over the past six years, becoming the biggest loser in a vicious industry slump that has reshaped global shipping. (Wall Street Journal)
China says it won’t hold trade talks unless Trump stops threats
China dashed prospects for a near-term resolution to the trade war with the U.S., warning President Donald Trump his threats of further tariffs are blocking any potential negotiations. (Bloomberg)
Oil prices at four-year high after OPEC rebuffs Trump
Oil prices jumped more than 2 percent to a four-year high on Monday after Saudi Arabia and Russia ruled out any immediate increase in production despite calls by U.S. President Donald Trump for action to raise global supply. (Reuters)
Final thoughts:
Tariffs may be starting to take their toll on America’s freight economy.
“West Coast container import volumes underperformed avg. M/M seasonality for the 2nd straight month in August, after outperforming all of 2Q, and it’s becoming harder to argue that tariff- related uncertainty isn’t impacting global trade patterns,” wrote Susquehanna transportation equities analyst Bascome Majors in a research note last week. “We don’t see cyclical signs flashing red (underlying demand strong, inventory levels low), but international freight forwarder EXPD is most in the crosshairs if escalation continues.”
Hammer down everyone!