Unpredictability in global supply chains
In August, uncertainty in the container market only grew, as if it weren’t already high enough.
At first glance, there may appear to be more predictability: there is greater clarity regarding US customs tariffs, not at the level that had been hoped for, and vessel punctuality continues to improve. Beneath the surface, however, the picture is far more complex.
US customs tariffs
Let’s start with the US customs tariffs. This analysis was written on 11 August, which is important, as the situation is evolving rapidly.
On 8 August, the so-called “Reciprocal” tariffs came into effect for most countries. “Reciprocal” means mutual and suggests predictability, but in practice, little of that is evident. Many countries received new tariffs that differ from those applied in April. These new tariffs were announced by President Trump in letters to various heads of state.
The adjustment of the tariffs means that the formula used in April no longer applies. At that time, “reciprocal” was calculated using a simple formula based on each country’s trade surplus with the US. Brazil, for example, has now been hit with a 50% tariff, as President Trump has political disagreements over the prosecution of former President Bolsonaro. India received an additional 25% tariff due to its purchase of Russian oil.
Specific markets
Canada, Mexico, and China form a separate category. Mexico was granted an additional 30-day tariff pause, whereas Canada was not. Products covered by the trade agreement between the US, Canada, and Mexico are temporarily exempt from the tariffs, although some product groups (such as automobiles, steel, and copper) are still affected.
China’s tariff pause expires on 12 August, which would, in principle, restore the “reciprocal” rate to 34%, plus a 20% “fentanyl tariff” and additional duties on two specific product groups. Whether this will take effect or be postponed remains uncertain, as do potential countermeasures from China.
The trade deal between the EU and the US so far resembles more of a statement of intent than a concrete agreement. Subsequently, the parties have published various drafts of the deal, and President Trump has announced high tariffs on pharmaceutical products.
The main issue, however, is the lack of predictability. If US trade measures followed a fixed formula, such as linking tariffs to the trade balance, the market would be more predictable. Predictability is crucial for supply chain planning.
At present, it seems unlikely that the current tariffs will remain unchanged for long. India, for example, was hit with additional tariffs due to its purchase of Russian oil, while other countries (such as China, Turkey, Brazil, and EU nations) continue to import larger volumes from Russia. It is therefore quite possible that more countries will suddenly face additional tariffs.
Another source of uncertainty is the effective date of the tariffs. The date for the “reciprocal” tariffs has been constantly shifting there was initially a 90-day pause, followed by a 30-day extension, and then a further 7 days added just before the deadline.
In addition, cargo loaded onto a vessel bound for the US before 7 August and cleared by 5 October is exempt from duties. With typical transit times, this is feasible.
The new 25% penalty tariff on India, effective from 27 August, is stricter: cargo loaded before this date is only exempt if it reaches the US before 17 September. Transit times from India to the US East Coast usually exceed a month, meaning some importers will be liable for duties on goods that were already on board before the tariff was announced.
Punctuality and Operational Challenges
On the positive side, vessel punctuality continues to improve, according to the latest figures from Sea-Intelligence. In June, 67% of ships on major trade routes arrived on time, nearly returning to pre-pandemic levels. The new alliances are also showing significant improvements.
However, “punctuality” has several dimensions. More large vessels are arriving on schedule, but shippers often experience things differently. Bottlenecks and delays at European ports sometimes result in skipped port calls, disrupting feeder vessel rotations. Cancellations in the Pacific are often not reflected in statistics, as delays are only recorded when a ship arrives. For example, a vessel that skips Antwerp but arrives on time in Rotterdam and Hamburg would register 100% punctuality, while importers in Antwerp experience a very different reality.
Taken together, this means that shippers must remain highly flexible when planning their supply chains, as both regulatory and operational conditions offer little short-term predictability.
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