Transmodal February 2025 Freight Update
Here are some of the top global supply chain stories happening right now.
Tariffs are the dominant story for global supply chains right now. And now they are going both ways. On February 10, 2025, China implemented 10-15% retaliatory tariffs on approximately $15-20 billion worth of U.S. goods, including coal, crude oil, agricultural machinery, certain automobiles, and liquefied natural gas. This is in response to the 10% tariff the new administration has put on about $450 billion of Chinese imports. China didn't stop there. They've also imposed import controls on rare metals that are essential for electrical components, initiated an antitrust investigation into Google, and blacklisted the parent company of Calvin Klein and Tommy Hilfiger. However, officials there have stated they are still open to dialogue with the US.
Our take: The war of tariffs continues, with new steel and aluminum tariffs also being announced. The situation is dynamic and changing day by day. Contact Transmodal with your questions and help understanding how your shipping costs will change if you're considering shifting sourcing to other countries.
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There's a new form of piracy on the high seas. The Houthis have turned to extortion after the ceasefire, establishing a system that requires—and may even demand—money from ships passing through the Red Sea. For that money, they'll get safe passage. Essentially, they've moved from random attacks to a streamlined, multi-billion-dollar business model. They even have a customer service support email for shippers to negotiate "safe passage fees." Despite the ceasefire, insurance premiums remain high, and vessels continue to incur additional fuel costs for rerouting, leaving carriers hesitant to transit through the Red Sea.
Our take: Despite some headlines, the Red Sea crisis is not resolved. Shippers should expect rates to be elevated and continued service disruptions in the region.
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Southeast Asia is experiencing a boom in manufacturing and exports, with Vietnam reporting a 14.3% increase in exports over the past year, generating $405.5 billion in revenue. An increased demand for electronics, garments, and smartphones are being shipped via express services to Europe and North America. This trend has air cargo carriers expanding their operations in the region to capitalize on demand. However, there are challenges, and experts are pointing out the need for caution in the face of geopolitical tensions, tariff threats, or economic fluctuations. Despite these challenges, the air cargo industry in Southeast Asia has positioned itself for continued growth in the coming years.
Our take: Beneficiaries of the tariff war will likely include many SE Asian countries. Many importers are actively looking for alternative locations for sourcing... already the trend it is just happening faster now. Transmodal has offices in Vietnam and other countries in the region. Contact us for a shipping quote!
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