Looming tariff increases cause major congestion

On March 1st, the 25% tariffs on $200 billion in Chinese goods will go into effect if a negotiation isn’t reached by the two countries. Doesn’t it feel like we’ve said that so many times already? The looming increase has been the talk of trade since they were announced and then delayed before the implementation date of January 1st. In an effort to avoid those tariffs, importers have been busy front loading cargo, bringing inventory into the US before it’s needed to then be warehoused until it can move to sellers across the country. The steady influx of cargo into warehouses and eventually on the road will complicate an already congested transportation situation in major cities around the country.

Congestion issues in traffic have been exacerbated by a shortage of drivers, the re-invigoration of the polar vortex that dropped snow and frigid temperatures on the Midwest US – where a chassis shortage was already slowing container traffic in major hubs. The overloaded traffic and now as warehouses are bursting at the seams leaves the world watching the negotiations as they play out between the US and china. Will cargo stop flowing because no deal is reached? Or will the US and China come to agreeable terms so the urgency of imports can fade into a more temperate climate?

Sticking points to the agreement include intellectual property, cyber theft and the trade imbalance between the two nations. Those are real issues that require careful negotiation because the nations are irrevocably betwixt to each other and facilitating healthy trade is beneficial to both though the path to get there is painful and uncomfortable for everyone who makes a living in trade and logistics. We at Edward J. Zarach & Associates are working hard to keep cargo moving as smoothly as possible during this tumult. If you have questions or concerns about cargo coming from China, we encourage you to reach out to your representative and discuss options.