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Uncertainty grows as US tariffs target China

Feb 5, 2025 | , , , , , , , , , , , , , ,

While last-minute negotiations resulted in a temporary reprieve for Canadian and Mexican imports, President Trump’s new tariffs on Chinese goods from the 4th February have already triggered retaliation, adding further pressure to international supply chains.

US tariffs on Canadian and Mexican imports have been put on hold for at least 30 days following security commitments from both nations. This delay offers temporary relief for critical trade lanes, including automotive components, electronics, and pharmaceuticals.

Canada has pledged increased border enforcement measures, including new personnel and surveillance technology, while Mexico has committed to deploying additional forces to its border. These actions have led to a pause in tariffs, but shippers should remain cautious as negotiations continue, with the risk of duties being reinstated if agreements are not finalised by March.

The US administration has implemented an additional 10% tariff on Chinese imports and in response China has introduced tariffs of up to 15% on selected US goods and imposed export controls, affecting critical technologies such as solar cell production. While these measures appear targeted, they contribute to an increasingly volatile trade environment, forcing businesses to reconsider sourcing strategies and logistics solutions.

US prepares further trade restrictions

Beyond tariffs, the US is tightening its stance on eCommerce imports by getting ready to suspend the de minimis exemption for shipments from China, as soon as adequate systems are in place to fully and expediently process and collect tariff revenue. Previously, goods valued under $800 could enter the US duty-free, but the removal of this exemption would be expected to severely impact cross-border eCommerce air cargo volumes.

In addition, new regulations, announced by US Customs and Border Protection, introduce additional filing requirements, increasing administrative burdens on online retailers and logistics providers. However, analysts suggest that while higher costs may impact some importers, consumer demand is unlikely to diminish significantly, given the relatively low average value of eCommerce purchases.

With ongoing negotiations between the US, Canada, and Mexico, and China’s measured response to tariffs, industry leaders remain cautiously optimistic. However, agility will be essential in navigating evolving trade policies and regulatory changes. As new agreements are brokered and tensions shift, shippers must remain adaptable to mitigate risks and capitalise on emerging opportunities.

As global trade policies shift and new tariffs reshape supply chains, proactive planning is more critical than ever. At Metro, we leverage award-winning services and deep industry expertise to help businesses navigate evolving trade barriers, regulatory changes, and supply chain disruptions.

Whether you need to mitigate the impact of tariffs, ensure compliance with new regulations, or adapt sourcing/export strategies, our tailored solutions keep your supply chain resilient and competitive.

EMAIL Andy Smith, Managing Director, today to explore how Metro can safeguard your supply chain and support your business in 2025 and beyond.

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Gemini Cooperation’s bid to transform reliability

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As the Gemini Cooperation officially launches, its promise of 90%-plus schedule reliability through a hub-and-spoke network is under intense scrutiny.

Maersk and Hapag-Lloyd, the two partners in the venture, aim to address persistent reliability issues in container shipping, where schedule adherence has remained stubbornly low, fluctuating between 50% and 55% throughout 2024.

Gemini’s hub-and-spoke model, which involves central hubs facilitating feeder services to final destinations, is designed to optimise transit efficiency. By consolidating mainline services at designated hubs, the carriers seek to mitigate congestion-related delays that can plague conventional port-to-port operations. 

With 340 vessels and a combined capacity of 3.7 million TEUs, the Gemini network will eventually offer 57 interconnected services – 29 mainline routes and 28 regional shuttles – once fully phased in by mid-year.

Overcoming historical challenges

Achieving the ambitious 90% schedule reliability target remains a formidable challenge, given the industry’s historical struggles with port congestion and operational disruptions. 

While Maersk and Hapag-Lloyd have consistently outperformed the industry average, their own reliability in 2024 remained below 60%. By controlling key transshipment hubs Gemini aims to establish a more predictable flow of goods. 

External risks, however, remain beyond the carriers’ control. Congestion at key ports in China, including Shanghai and Ningbo, has intensified due to demand outpacing capacity growth. The ability of the Gemini model to navigate such disruptions will be crucial in determining its success.

A question of market adoption

Beyond operational feasibility, the long-term viability of Gemini hinges on whether shippers are willing to prioritise schedule reliability over cost savings. The model’s success will depend on whether customers are prepared to pay a premium for consistency, particularly in an uncertain 2025 market. While some shippers may value reduced inventory costs enabled by greater reliability, past efforts to introduce premium services struggled due to market fragmentation and price sensitivity.

With the majority of shippers valuing end-to-end reliability rather than just punctuality between hubs, the challenge for Gemini will be to demonstrate that its model can deliver comprehensive benefits across the entire supply chain.

An industry-first experiment

With competing alliances, Ocean Alliance, Premier Alliance and MSC continuing to favour traditional port-to-port networks, Gemini’s decision to embrace the hub-and-spoke model sets it apart. For ‘Ocean’ and ‘Premier’ it is more or less ‘business as usual’, with their service structure based upon the current setups. 

In particular ‘Ocean’s’ network remains largely unchanged, except for the re-launch of a seventh Far East to Europe service. Further to this, the alliance will add the South Chinese port of Yang- pu, on Hainan Island, to two of its Asia to North America loops. 

‘Premier’ mainly maintains the former THEA services and it will compensate the departure of Hapag-Lloyd by slot agreements with MSC on Far East to Europe services. Operationally, the partners will keep full control of ‘their’ loops, while retaining an existing Vessel Sharing Agreement with Wan Hai Lines in the Transpacific trade. ‘Premier’s’ largest member, ONE, will also continue a Transatlantic Vessel Sharing Agreement with the members of ‘Ocean’. 

With the network still in its early stages, industry observers remain divided on whether Gemini can deliver on its promises. Yet, if the venture achieves its ambitious targets, it could compel competitors to rethink their approach. The coming months will provide the first indications of whether this bold experiment will reshape global container shipping or simply become another ambitious but short-lived attempt at reform.

Metro negotiates rates and volume agreements with a broad portfolio of carriers, including MSC and the three major alliances, ensuring shippers have access to the widest range of service options, port pairings, and competitive rates. 

Our tailored ocean freight solutions reflect each customer’s unique requirements and expectations, delivering optimised logistics strategies. For expert guidance EMAIL Andy Smith, Managing Director, to review your situation and find the best solution for your supply chain.

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Air cargo demand defies regulatory uncertainty

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In the final week of January, just before Lunar New Year, air freight spot rates continued their upward trend, rising 4% WoW and remaining 11% higher than 2024, supported by strong demand and tight capacity.

Market conditions remained resilient, with Asia-Pacific leading the growth as businesses rushed shipments before factory closures. While tonnages and spot rates have risen steadily in recent weeks (2% and 6%), comparisons to previous years are complicated by the earlier timing of Lunar New Year in 2025.

Asia Pacific to Europe volumes rebounded for a third consecutive week, approaching levels seen in mid-December. Similarly, demand on the transpacific route increased after a seasonal decline, with volumes and rates gradually strengthening. Despite some fluctuations, the market remains significantly stronger than last year, with rates holding firm and demand outpacing 2024 levels.

Regulatory headwinds create uncertainty

Despite a strong start to the year, regulatory developments in the US are introducing new challenges for air cargo. The shift toward protectionist policies has created uncertainty, particularly following the recent trade dispute with Colombia, where tariff threats were used as a negotiation tool. This approach signals a departure from predictable, rule-based trade agreements, raising concerns over future disruptions.

Uncertainty also surrounds changes to US de-minimis rules, which previously allowed low-value imports under $800 to enter tax-free. The exemption for Chinese goods has been suspended, a move expected to disrupt eCommerce shipments that have fuelled air cargo growth. Additionally, new filing requirements proposed by US Customs and Border Protection (CBP) would impose additional administrative burdens on cross-border eCommerce, impacting the more than 1.4 billion packages expected to enter the US this year.

Despite these concerns, industry experts believe the impact on consumer behaviour may be minimal, as the average value of eCommerce purchases is relatively low, suggesting that elevated eCommerce volumes may continue. While increased taxation could affect logistics costs, major policy shifts would require legislative approval, making immediate changes unlikely.

Outlook

While demand is still slightly below December’s peak, it has surpassed October levels, suggesting continued resilience. Over the past five weeks, available cargo capacity has increased across all major regions, with Europe and North America experiencing the most significant growth. Chargeable weight trends varied by region, with notable year-on-year increases in Asia Pacific and Africa, while other regions remained relatively stable.

Industry leaders emphasise the need for agility in navigating shifting trade policies, drawing parallels to the Year of the Snake, which symbolises adaptability. While challenges remain, the consensus is that air cargo demand will remain strong into 2025, with the market well-positioned to weather logistical and regulatory changes.

Metro’s airfreight, charter, and sea/air solutions strike the perfect balance of speed, cost-efficiency and resilience for time-sensitive, urgent and high-value shipments.

With block space agreements (BSA) and capacity purchase agreements (CPA) in place, we secure priority access to space and competitive rates on the busiest trade lanes. 

Whatever you’re shipping, our expertise and strategic carrier partnerships keep your cargo moving—on time and within budget.

Stay ahead in a volatile market. EMAIL Elliot Carlile, Operations Director, today to explore how Metro can support your business.

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Road freight resilience amid industry turbulence

Feb 5, 2025 | , , , , , , , , , ,

Despite rising costs, political uncertainties, and sluggish economic growth presenting formidable obstacles for road freight operators, Metro remains a standout performer, driving forward with an optimistic outlook, bolstered by sustained expansion and strategic investments.

The UK’s haulage sector is bracing for what could be its most difficult year since the Covid-19 pandemic. Businesses are contending with increased operational expenses, stemming from policy changes such as National Insurance contribution adjustments and minimum wage hikes. These factors place additional financial strain on operators already struggling with freight volumes and inflationary pressures.

Across Europe, the freight industry has struggled with stagnating demand, particularly in Germany, where truck mileage—a key indicator of transport activity—has continued to decline. While a modest economic recovery is forecast, growth in the road freight volumes are expected to remain tight, reflecting broader economic uncertainties.

Challenging yet recovering market

The European road freight market is set to experience a gradual recovery in 2025, with overall activity expected to increase by 2%. This is largely driven by a projected improvement in GDP growth across the eurozone and a stabilisation of inflation. The international freight segment is forecast to grow at a slightly higher rate, indicating renewed confidence in cross-border trade.

However, challenges persist. The UK’s fiscal expansion is anticipated to temporarily boost domestic demand, yet higher operational costs are expected to maintain inflation at elevated levels. The market-wide outlook remains cautious, with operators needing to navigate a delicate balance between cost pressures and service efficiency.

Positioned for success

Despite the challenging conditions affecting the broader industry, Metro’s road freight division continues to defy trends, delivering exceptional year-on-year growth. While many competitors have struggled to maintain volumes, Metro has expanded significantly, with a marked increase in team size and service capabilities.

Key to this success is the company’s strategic focus on expanding its European network. Recently introduced groupage services to the Netherlands, Poland, and Iberia are set to drive further growth, complementing well-established French and German routes. 

Additionally, Metro’s investment in less-than-truckload (LTL) and full-truckload (FTL) services positions it for continued success, ensuring efficient and scalable transport solutions across Europe.

By prioritising service expansion, operational efficiency, and customer-driven innovation, the company continues to outpace market trends. Metro’s proactive approach ensures its customers benefit from reliable, cost-effective, and resilient transport solutions in an otherwise volatile market.

To explore the potential and benefits of our road freight services EMAIL Richard Gibbs to begin a conversation.

Category: Exports

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