US tariffs will support elevated ocean freight rates going into October, according to Wan Hai Lines’ GM, Tommy Hsieh (pictured above right).
The 10% tariff imposed on US imports globally had caused Asian shippers to front-load before it expired next month, he told the company’s AGM on Friday..
Furthermore, Taiwan’s parliament, the Executive Yuan, has announced that the US would be likely to cap tariffs on imports of auto parts and wood-derivative products from the island, at 15%.
Additionally, imports of steel, aluminium and copper-derivative products used in aircraft components would be exempted from tariffs under Section 232 of the US Trade Expansion Act.
Mr Hsieh said: “These goods are among the cargo shipped by Wan Hai, and the tariffs would support shipping demand. Given current market conditions, it won’t be easy to bring down freight rates.”
The peak season for container shipping, typically between July and October, came early as Asian shippers, concerned with tightening vessel supply amid the US/Israel-Iran conflict, are moving out goods early to the US and Europe.
On 18 May, Wan Hai and ONE jointly launched a transpacific service, which the Taiwanese operator is marketing as Asia Pacific 2 (AP2). Calling at Qingdao, Ningbo, Los Angeles, Oakland, and Qingdao, it will turn in six weeks and will initially deploy five ships with one skipped sailing in each cycle.
ONE will operate three ships and Wan Hai will deploy two, starting with the 4,680 teu Wan Hai 517.
Besides the early peak season, Mr Hsieh said that the US/Israel-Iran conflict had nearly depleted inventories of consumer goods in the Middle East, a trend that should also support container shipping.
“Restocking began in May, leading to congestion at some Red Sea ports and spillover effects to ports in India and Singapore, which also helped support rising freight rates. We expect freight rates to stay high into October,” he said.
For Q1 26, Wan Hai’s revenue was down 9% from Q1 25, to $1.05bn (TW$33.64bn), while net profit declined 12%, to $240.3m. A dividend of TW$3 per share was declared.