With trade uncertainty mounting, American companies are pulling forward holiday orders by several weeks, putting significant pressure on supply chains and freight prices.
US retailers step up holiday orders from China amid tariff fears
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Retailers in the United States are accelerating their procurement cycles, shifting holiday orders from Chinese suppliers forward by four to six weeks. This strategic move aims to fortify inventories ahead of the Black Friday and Christmas periods, as businesses brace for potential escalations in U.S. import tariffs, Reuters reports.
While a recent visit by President Donald Trump to China has maintained a degree of diplomatic stability, uncertainty continues to cast a long shadow over bilateral trade. A current 10 percent universal tariff implemented by Washington in February is set to expire on 24 July, with markets widely anticipating its replacement by even stricter levies.
“There is an expectation that tariffs could be raised again, or restored to previous levels, so everyone is rushing to get goods in before that happens,” Tony Meng, a senior sales manager based in China for the shipping firm XPD Global, told Reuters.
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This early stockpiling has resulted in a significant surge in freight volumes during May and June, significantly outpacing the typical pattern of holiday orders. Consequently, shipping costs have climbed steeply. Data from the maritime consultancy Drewry indicates that spot shipping rates from Shanghai to New York rose to US$7,149 per 40-foot container as of 25 June – a 25 percent increase compared to the previous year. Similarly, routes from Shanghai to Los Angeles have seen costs jump 54 percent year-on-year.
Holiday orders to taper off
Despite the rise in logistics activity, some analysts argue that consumer demand remains lacklustre. Kyle Henderson, CEO of the container-tracking software provider Vizion, described current U.S. demand as “normal-to-soft,” suggesting that the spike in shipping fees is driven as much by capacity management – including cancelled sailings – as by actual consumption. Henderson anticipates that volumes of holiday orders will likely taper off after July, as the combination of earlier deliveries and structurally higher costs for Chinese goods takes effect.
For Chinese manufacturers, particularly those in less technologically sophisticated sectors, these rising shipping expenses present a formidable challenge, Reuters says. Jin Chaofeng, a producer of outdoor furniture, noted the difficulty of passing these costs on to customers, citing thin profit margins and limited pricing power.
