Why growing protectionism resulting from the US/China trade war makes more intelligent cargo protection a higher priority than ever

Threats of new tariffs sparked by the war of words between the US and China seem to escalate daily. But on August 5^th 2019, reports that Chinese state-owned companies are going to suspend imports of US agricultural products took this to a new level. China is a vast market for the US agricultural sector and this latest news is not simply a further threat of tariffs but an outright ban. On the same day, the US Treasury formally accused China of manipulating the renminbi to create an unfair trade advantage.

These sorts of announcements are causing business uncertainties and leading to market fluctuations which the US administration then seeks to diffuse with more conciliatory suggestions. Speaking to CNBC, Larry Kudlow, the White House’s leading economic adviser, said that the President wants to take a flexible approach stating “We’re planning for the Chinese team to come here in September. Things could change with respect to the tariffs.” But coming hard on the heels of an announcement from the president the previous week, that he would impose tariffs on another $300 billion of Chinese products from September 1, it is hard to foresee the future with any degree of certainty.

Analysts agree that, if actioned, these developments will create new imbalances between in and outbound container traffic across the Pacific, creating real problems for shippers trying to maximize backhauling efficiencies. This is likely to push up freight rates for US importers further compounding the pressures of new tariffs. We have covered how shippers have been responding to the challenges of empty containers in our piece on the potential of utilizing non-operating reefers but this latest announcement will create new difficulties.

As opportunities close for one supply chain, new trade routes will emerge. The share of Australian beef exports going to China has risen from 9.5% in 2017 to 24.5% in 2019 and Australia has been the main beneficiary of the decline in US imports to mainland China. While America’s exports have fallen by $17.1 billion Australia, has seen a $7.1 billion upswing.

As producers are forced to seek out new markets for their goods, it is vital that they fully understand the physical dynamics and regulations over new trade routes. Working with a cargo protection expert with a truly global understanding will ensure that they can adapt to new trading conditions quickly and effectively. Cordstrap are the world’s only truly global cargo protection company with a network of suppliers in over 50 countries who can provide training and support backed with genuinely global expertise.

Our innovative solutions have been engineered to provide unrivalled protection for cargo of every description on every modality. Our market-leading cargo container portfolio was recently extended with the launch of AnchorLash HD. These solutions are fully CTU code compliant and we work closely with all the world’s major regulators and insurers, including DNV, the IMO, Mariterm AB , Eurosafe and the Associatiob of American Railroads (AAR) to ensure our protection conforms to cargo securing requirements wherever their destination. What’s more, our cargo protection solutions have been carefully engineered to make them safer, faster and less labor-intensive to deploy, helping you drive up competitiveness by minimizing delays and operating costs.

Our latest innovation, Cordstrap Cargo Monitoring, is a service which uses IoT technology to feedback data on temperature, moisture levels, physical shocks, container opening and location in real time. This not only offers huge reassurance to customers deploying new routes, but also enables us to build a substantial databank of the forces and conditions shipments are likely to experience on any trade route. This unrivalled insight enables us to engineer optimal cargo protection solutions for your shipments 

To find out how we can help you adapt your supply chain to make the most of global opportunities and minimize the impact of new trade barriers, contact your local expert.