United States-based Freightos marketplace data propose that among U.S. importers, Coronavirus has deepened a trend that was started by the US-China trade war.
Importers are more and more looking for regional suppliers other than China. The share of pursuits for countries other than China has amounted to more than 17% so far in March 2020, up from less than 8% a year ago.
The Coronavirus has pushed US importers to non-Chinese Asian sources for their products. The situation in China is still bleak due to the COVID-19 virus outbreak.
According to Eytan Buchman, Chief Marketing Officer of Freightos, “Various provinces and cities in China have prolonged the (Chinese New Year holiday) shutdown, some even until March 1.”
“Highway and transportation closures, and mandatory 14-day quarantines for people returning home from strongly affected areas, mean that even in places no longer shut down, the return to normal at factories and ports will be slow,” Buchman added.
In terms of rates, with nominal manufacturing and cargo to ship, demand has dipped below what was predicted for post-Chinese New Year.
Buchman noted that Chinese-U.S. rates have so far remained unchanged from their pre-holiday and pre-outbreak levels.
The share of searches for countries other than China has climbed to more than 17% so far this month, up from less than 8% a year ago.
He believes China-U.S. rates “may start to fall … in the short term as the shutdown drags on,” but when “production does pick up in full force — possibly not until mid-March — the spiking demand and reduced number of ships in the region will push freight prices up.”
Freightos provides an index (SONAR: FBDXD.CNAW) that tracks the daily change in the price to ship a forty-foot equivalent unit (FEU) container from China to West Coast ports such as Los Angeles and Long Beach.