Eastbound Trans-Pacific Shippers Delay Contracts Amid Tariff Woes

Contract negotiations for eastbound trans-Pacific ocean freight are running behind schedule as
tariff uncertainties tied to the Trump administration’s trade policy continue to disrupt the
traditional timeline.

Talks that typically conclude by early April for major U.S. importers and stretch into May for non-
vessel-operating common carriers (NVOs) are now delayed by at least two weeks, according to
sources in a Journal of Commerce report.

Shipping lines are being forced to extend existing agreements past their usual April 30
expiration as shippers grapple with the unclear outlook for U.S.-China trade relations over the
next 12 months.

The source of the delay lies in the unpredictability of tariffs and their potential impact on
commerce across the U.S.’s busiest trade lane. Shippers are hesitant to commit to volume
levels required under minimum quantity commitments (MQCs), which bind them to specified
import quantities throughout the duration of the annual contracts.

Adding to the gridlock is a brewing standoff between the largest U.S. retailers and ocean
carriers over a $100-per-FEU (forty-foot equivalent unit) rate difference. Retailers are pushing
for no more than $1,500 per FEU to West Coast ports, while carriers are standing firm at
$1,600—a floor negotiated earlier this month. East Coast rates are similarly holding at $2,600
per FEU.

An industry consultant who formerly served as a logistics manager at national retailers told JOC
in the same report that $100 per FEU may not sound like a game-breaker, but “if you’re shipping
a couple of hundred thousand containers, that’s a lot of money.”

Meanwhile, second- and third-tier importers, along with most NVOs, have either finalized their
deals or are close to wrapping them up, accepting rates between $1,600 and $1,900 per FEU
for West Coast routes. But many are holding off on signing until the industry’s biggest players
settle, effectively setting the floor for everyone else.