In Uncertain Era for Shippers, Analysts Suggest Avoiding Long Contracts
Shippers are adjusting to an unpredictable mix of geopolitical disruption, economic uncertainty and sweeping tariff changes, and some of the most prominent container freight experts are advising their clients to avoid locking in long-term contracts until the dust settles.
In a webinar held by the container leasing platform Container XChange, a panel of executives and analysts discussed the changing dynamics of ocean freight. The market is now driven in part by an array of political circumstances – particularly the on-and-off shutdown of the Red Sea, and the White House’s changing tariff announcements.
The U.S. Trade Representative’s proposed multimillion-dollar port fees for Chinese-built ships could have particularly significant effects on U.S. trade patterns, and the industry is watching closely. Xeneta’s top analyst, Peter Sand, noted that all top six carriers have fleets that are more than 20 percent Chinese-built and orderbooks that are more than 40 percent Chinese. He called the fee proposal “a challenge to globalization and free competition,” and recommended an analytical rather than reactive business response.
“Uncertainty is toxic for trade, and businesses today are overwhelmed by shifting regulations, unpredictable
tariffs, and constantly changing trade dynamics. The best advice? Stay calm, keep your options open, and avoid locking into long-term commitments without a clear upside,” recommended Xeneta’s Peter Sand. “Businesses should focus on data-driven decision-making, risk management, and adaptable logistics strategies to navigate an
increasingly volatile market.”
The White House has already imposed tariffs of 20 percent on Chinese goods. Circuitous routing is one common response, and one container equipment trader suggested that business is already picking up for moving cargo through Southeast Asia, the Mideast or the Subcontinent.
The Red Sea is another wild card. If it reopens and stays stable, global slot capacity will increase and rates will come down – but only if carriers
