The U.S. election outcome could greatly impact the global shipping industry, as a clear result and policy direction are essential for stable trade. For shippers and carriers, prolonged uncertainty could lead to preparation for stricter trade policies. This article explores the election’s impact and the role of uncertainty in the container shipping sector.
Impact of Election Uncertainty on Shipping
Uncertainty over the U.S. election results may be more disruptive than any specific policy. A delayed or contested result could leave shippers guessing on policy shifts for up to a month.
Xeneta’s chief analyst, Peter Sand, emphasizes that a swift and transparent result is better than prolonged debates or litigation. Uncertainty could force shippers to brace for the strictest regulatory outcomes, preparing for potential tariffs and regulations.
What Election Outcome Could Mean for Trade
Protectionist Policies Under a Trump Presidency
A Trump victory would likely continue protectionist trade policies, including high tariffs affecting global trade. Sand notes that while the rhetoric may be harsher than policy, importers may frontload goods to avoid tariff increases, potentially raising vessel utilization and rates.
Lighter Regulations with a Kamala Harris Victory
In contrast, a Kamala Harris win could reduce tariff pressures, making frontloading less urgent. It would stabilize shipping rates as supply and demand align more predictably.
The Short-Term Outlook for Shipping Rates
Despite the election’s impact, fundamentals suggest rates may decline. Linerlytica reports that while carriers raised rates in November, these increases were lower than expected. The Shanghai Containerized Freight Index (SCFI) and China Containerized Freight Index (CCFI) have seen declines of 45% and 37% since July.
Blanked sailings and delays during China’s Golden Week temporarily raised utilization in October. However, Sand expects General Rate Increases (GRIs) may not hold in November, with rates likely to settle lower.
What’s Next for Shippers and Carriers?
A Trump win could increase frontloading, temporarily boosting shipping rates. However, the weak November period and current fundamentals suggest rates will likely drop again mid-month. Carriers may struggle to maintain rate hikes without further capacity cuts.
Conclusion
As the U.S. election unfolds, uncertainty remains the container shipping industry’s biggest challenge. A decisive result would bring clarity, while delays may lead to stricter policies. For shippers, flexibility and preparation are key to navigating these shifting market conditions.
