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Space Issues and rate increases

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We can foreseen the tension of spaces demand are extremely high not until the early October.  Usually as from September to early October should be the highest season
for the year because of the Christmas and New Year seasonal expenditures.

FORECAST:
The demand of space as from China to USWC and USEC are extremely high due to the trade war and the July bad weather (typhoons/storms struck to China coasts).  
Compare the USWC and USEC and you will find the demand of West Coast is higher than the East Coast as the result of a lot of commodities will shift from the East Coast to
the West Coast in order to clearance their cargoes before the mid of September

REASON:
1.     In January, Trump imposed tariffs on imports by imposing tariffs of 25 percent of imported steel and 10 percent on imported aluminum.  That intimidate both
manufacturers and buyers want to complete their deals as early as it could. Simultaneously lead to the high demand of spaces and this tension has not been solve till end of
July.

2.     Both China and United States slow down their clearance speed in the way of increase the amount of random inspection that caused vessels line up outside of port for
berthing. In the return, transit time increase and the supply on spaces decrease.

3.     Section 301 Tariffs (another $200 billion) imposing.  Amount those named $200 billion of commodities only $34 billion worth of imports from China were release with
effective on July 6th.  The balance of worth hasn’t announced the effective date as the United State Trade Representative (USTR) held public hearings for rebuttal 301
tariffs. Therefore, more and more buyers eager receive their goods prior to the tariffs effect. That is why the demand of West coast increase as its transit time is much less
than one half of East coast.

QUOTE:  STATUS OF SECTION 301 TARIFFS:
First Section 301 Tariffs ($200 billion) Effective on July 6; Second List of Tariff Lines Introduced for Review First Section 301 Tariffs ($200 billion) Effective on July 6; Second
List of Tariff Lines Introduced for Review.
On June 15, the Office of the United States Trade Representative (USTR) issued a press release announcing its intent to impose additional tariffs on products imported from
China. The additional tariffs are part of the U.S.’ response to China’s unfair trade practices related to “the forced transfer of American technology and intellectual property”
pursuant to Section 301 of the Trade Act of 1974.

Two lists of tariff lines were released.
The first list includes 818 of the original 1,333 lines and is valued at $34 billion worth of imports from China. Products falling under these tariff lines will see an additional
duty of 25 percent beginning on July 6.

The second list consists of 284 new tariff lines identified by the interagency Section 301 Committee as “benefiting from Chinese industrial policies, including the “Made in
China 2025” industrial policy.” These 284 lines cover approximately $16 billion worth of imports from China. This list will undergo further review in a public notice and
comment process, including a public hearing. After completion of this process, USTR will issue a final determination on the products from this list that would be subject to the
additional duties.

UNQUOTE
4.     Bad Weather and Storms struck China Coast (Xiamen, Shanghai, Qingdao, Dalian). Tropical storm “Ampil” struck Shanghai of the week of July 22rd that caused
voyages suspended two days. The high demand of spaces lasting on and on.

CONCLUSION
The phenomenon on high demand of spaces will keep on and on till end of September or early October. However the low season will come early than before as of the result
and the influences of Trade War.