Featured Headlines:
Air Freight's Losing Streak: Tariffs Pull the Plug on Fast Fashion
BIS Prescribes a New "232 Checkup" for Pharma Imports
BIS Scrubs the Boycott Requester List: Spring 2025 Edition
Pills, Phones and Panic: The Race is on Before Tariffs Hit
From Front-Loading to Freefall?
DOT Asks Truckers and Shippers to Sound Off
Carrier Reliability Race
- Maersk and Hapag-Lloyd’s Gemini Cooperation continues to top the charts in liner schedule reliability, with an 86% on-time arrival rate in Q1 across all trades—far ahead of rival alliances.
- That said, early Q2 data suggests a slip: Gemini’s on-time rate dropped to 76% in week 16, hinting at growing pains as new network structures settle in.
- For Q1 comparisons:
- Premier Alliance (with MSC included): 31%
- Ocean Alliance: 25%
- MSC (outside Premier): 22%
- Independent east-west services: 30%
- Some European forwarders report delays on backhaul routes, where strict Gemini departure schedules are causing containers bound for Asia to be rolled due to insufficient terminal time for loading.
- Further downstream, cracks are forming in the Asian feeder network. Multiple reports note space restrictions on feeder vessels to Southeast Asian destinations. Carriers cite full vessels and possible congestion in Singapore and Pelepas.
- While Gemini’s big-hub strategy may boost mainline efficiency, its reliance on non-Gemini-operated feeder links could limit reach and flexibility, especially in high-growth regional trades.
- With blank sailings soaring from China to US, the definition of “reliability” itself will soon be in question. If you announce a sailing and cancel that sailing, does that count against transit time? We feel sure it will depend on who you ask!
- Learn more about the current ocean freight scoreboard in our recent Shap Blog: The Science Behind the Ocean Shipping Alliance.
Air Freight's Losing Streak: Tariffs Pull the Plug on Fast Fashion
- The U.S. has eliminated duty-free de minimis privileges and announced a 90% tariff or $75 flat fee on low-value Chinese e-commerce shipments, effective May 2—more than doubling the hit for platforms like Temu, Shein, Alibaba, and the mad world of Fulfilled by Amazon shippers.
- That flat fee increases again on June 1 to $150 per item, part of President Trump’s sweeping escalation in the trade war with China.
- These changes follow the end of the $800 de minimis exemption and will force millions of parcels into the formal customs entry process, adding fees, documentation, delays, and inspection backlogs.
- The biggest impact? Airfreight demand from China is expected to collapse. Industry insiders warn of a “brutal” demand drop, as e-retailers can no longer rely on expensive direct-to-consumer fulfillment via air.
- Temu and Shein’s low-cost business model could unravel as costs pile up. A $30 dress could now cost over $60 or more after duties, customs fees, and compliance costs—undercutting their core pricing advantage.
- And American landfills wipe their brows in anticipation of less work!
- Air cargo carriers are particularly vulnerable. Digital marketplaces in China accounted for nearly two-thirds of trans-Pacific airfreight volume last year, driven largely by de minimis shipments.
- Expect a shift back to ocean freight and B2B2C models, with inventory warehoused in the U.S. before final delivery. This also benefits retailers like Amazon, which has ramped up U.S.-based “Haul” listings from domestic brands like Levi’s.
BIS Prescribes a New "232 Checkup" for Pharma Imports
- Heads up, trade watchers—the Bureau of Industry and Security (BIS), part of the U.S. Department of Commerce, has officially placed pharmaceutical imports under the microscope.
- BIS recently submitted a notice for public inspection and opened the floor for public comments as it launches a national security investigation into the importation of Pharmaceuticals and Pharmaceutical Ingredients under Section 232 of the Trade Expansion Act of 1962.
- The investigation will assess whether reliance on foreign sources for the following products poses a risk to U.S. national security:
- Finished drug products (both generic and non-generic),
- Medical countermeasures,
- Active pharmaceutical ingredients (APIs),
- Key starting materials,
- Derivative products.
- Public comments are strongly encouraged—but make sure to submit them within 21 days of the Federal Register publication (which was released on April 16, 2025).
- BIS has also flagged specific areas of interest for feedback, including:
- The current and projected demand for pharmaceutical products and inputs in the U.S.,
- Whether U.S. manufacturers have the capacity to meet that demand,
- The level of dependency on foreign supply chains,
- Potential risks tied to supplier concentration,
- The impact of foreign subsidies, unfair trade practices, or overproduction,
- Whether foreign governments might leverage export controls or weaponize supply,
- The feasibility of boosting domestic production,
- The effectiveness of current trade tools such as tariffs and quotas,
- Any other factors relevant to national security.
- For more info or questions, you can reach out to Stephen Astle, Director of the Defense Industrial Base Division, at [email protected] or call 202-482-2533.
BIS Scrubs the Boycott Requester List: Spring 2025 Edition
- The Bureau of Industry and Security (BIS) rang in April with updates to its Boycott Requester List, releasing the latest names on April 3, 2025.
- For those keeping track, this list identifies foreign companies that have made boycott-related requests—including any that ask U.S. businesses to comply with the Arab League boycott of Israel.
- Under U.S. law, BIS enforces anti-boycott rules designed to prevent (and, in some cases, prohibit) U.S. individuals and businesses from participating in unsanctioned foreign boycotts—with a sharp focus on Arab League-related requests.
- As part of this round of updates:
- 30 new entities were added to the list.
- 18 entities were removed after certifying they’ve ceased making boycott-related requests in their dealings with U.S. companies.
- Since the list’s launch in March 2024, BIS reports that more than 65 entities—most tied to countries that have historically supported the Arab League boycott—have agreed to remove boycott-related terms from their transactions with U.S. persons.
- The latest version of the list, which is designed to help U.S. businesses stay compliant with the anti-boycott reporting obligations outlined in Part 760 of the Export Administration Regulations (EAR), is now available on the OAC webpage.
Pills, Phones and Panic: The Race is on Before Tariffs Hit
- Electronics, pharma exporters, and shippers from the “Lands of the Reciprocal” are scrambling to beat the clock as the U.S. hints at new, sector-specific tariffs while pausing reciprocal tariffs for 90 days. Expect some traffic jams on the ocean beyond China.
- The White House clarified that electronics like phones, laptops, and semiconductors are excluded from the new 145% China-wide tariff, but they will face their own future tariff regime—with Trump calling it a “separate bucket.”
- Even with that exclusion, Chinese-made electronics are still subject to the existing 20% fentanyl-related IEEPA tariffs, further complicating sourcing strategies.
- Products from Vietnam and other non-China origins remain tariff-free for now, sending Asian shippers into a capacity-grabbing frenzy.
- A full list of electronics targeted for future tariffs includes smartphones, laptops, semiconductor manufacturing tools, flat-panel displays, and solar cells, though exact HTS codes and rates are still pending.
- Pharmaceutical shippers also brace for impact as Trump teased a new “basket” of tariffs targeting the sector. With this week’s formal announcement, there is concern of added disruption to Asia-US and transatlantic pharma flows.
- The EU exported $127 billion in pharmaceuticals to the U.S. last year, while China and India also face obvious pressure. Industry insiders are watching closely, hoping U.S. drug shortages and high prices might force a policy rethink.
- See our Regulatory section for more information about submitting comments on pharmaceutical items!
From Front-Loading to Freefall?
- U.S. cargo owners are being told to brace for a potential “cliff event” in volumes reminiscent of the early pandemic shock—this time triggered by front-loading ahead of tariffs, followed by a sudden drop in freight demand.
- China’s customs data shows a 12.4% year-over-year (YoY) export surge in March, with exports to the U.S. up 8.8%, signaling a pre-tariff rush by shippers to beat the clock. Since March, however, exports from China to the US are down an astounding 65%!
- Intermodal volumes are straining, particularly on routes from the U.S. West Coast.
- The bigger concern? A steep drop in freight demand beyond China is likely once the front-loaded volumes taper off. ITS forecasts a “Covid-style cliff” in May and June.
- Regional US intermodal trucking forecasts show steep declines this May/June in the Northwest (61%), West (52%), and Southwest (48%). Even the Northeast—historically more stable—is down 18%.
- Outbound U.S. traffic to China is also reported as “paused or canceled”, reflecting widespread trade uncertainty. Early forecasts call for a 50% decline at minimum.
DOT Asks Truckers and Shippers to Sound Off
- The U.S. Department of Transportation (DOT) is asking truckers, logistics firms, and small businesses for input on which regulations should be trimmed, modernized, or tossed out altogether as part of a broader regulatory reform initiative.
- The effort follows a new wave of executive orders from President Trump, including a “10-for-1” directive requiring agencies to propose repealing at least 10 existing rules for every new one introduced—a major escalation from the “2-for-1” order of the prior administration.
- The DOT is especially interested in regulations that are illogical, outdated, duplicative, or ineffective—or those that add unnecessary cost to compliance, permitting, or project delivery.
- The DOT says it’s seeking to “act in a lawful, prudent, and financially responsible manner” with both public and private funds, while maintaining a safe and efficient U.S. transportation system.
- The comment deadline for the Federal Register notice is May 5, giving industry stakeholders a short window to provide feedback and help shape future policy.