Solar Energy News Update (November 2024)

According to the latest warning from Norwegian maritime and freight benchmark platform Xeneta, spot freight rates for container shipping could rise due to the re-election of Donald Trump as U.S. President. Xeneta’s statement noted that Trump has vowed to impose tariffs of up to 20% on all imports to the U.S., particularly targeting goods from China, with additional tariffs potentially reaching 60% to 100%.

The company recalled the situation during Trump’s previous trade war in 2018, when high tariffs on Chinese goods caused container shipping costs to surge by over 70%. “According to Xeneta’s data, when Trump raised tariffs at that time, freight costs for container shipping skyrocketed,” the company noted.

Xeneta also pointed out that U.S. importers and exporters are accelerating procurement in anticipation of potential increases in shipping rates. The company expects that the preparatory work for this trade war will play a significant role in preventing the chaos of 2018 from repeating itself.

Xeneta’s chief analyst, Peter Sand, told PV Magazine that shipping supply chain professionals have been dealing with changing risk management challenges in recent months. “First, there were strikes at U.S. East Coast and Gulf Coast ports, followed by the impact of the U.S. presidential election,” he explained. “As the uncertainty of the election results fades, the focus is shifting toward executing contingency plans and preparing for the transition to a new round of tariff regimes.”

Sand further explained that U.S. retailers have proactively stocked up in the past year to mitigate potential supply chain disruptions, giving importers some strategic maneuvering space. He pointed out that there are currently no signs that freight activity will spike significantly.

He added, “Spot container shipping rates, especially from the Far East/China to the U.S. East Coast, have recently risen by $150 per 40-foot equivalent unit, while West Coast rates have also seen a similar decline in the past three months.”

In the first half of 2024, shipping costs surged due to the Red Sea crisis. Sand noted, “The potential for early loading and strikes at U.S. East Coast and Gulf Coast ports is increasing.”

Xeneta also warned that other countries and trade groups, particularly the EU, may also impose tariffs, which could further drive up international shipping costs. The company highlighted that “monitoring container shipping data for backhaul trade is becoming increasingly important, as a global trade war could affect these data points as well.”

Xeneta emphasized that the escalation of trade wars could force some shippers to adjust their supply chains and import goods to the U.S. via alternative routes. Specifically, they may opt to set up production facilities in other Far East countries, but this process would be time-consuming and costly.