Ongoing uncertainty around the Trump administration’s shifting tariff policies is disrupting the usual schedule for signing annual service contracts between ocean carriers and importers on the eastbound trans-Pacific trade lane.

According to sources cited by the Journal of Commerce, negotiations that typically conclude by late April for contracts starting May 1 have been delayed by at least two weeks. The primary cause is confusion surrounding the broader tariff landscape, particularly the ongoing U.S.-China trade dispute, which is clouding the outlook for the next 12 months of shipping activity.

“The tariff tiff is complicating matters,” said Ben Coleman, president of Teampower Logistics.

Carriers and major retailers are currently locked in negotiations over pricing for the 2025–26 contract season. However, uncertainty over tariffs has made shippers hesitant to commit to minimum quantity commitments (MQCs), a key element of these contracts.

Kevin Parkerson, a logistics consultant and former retail logistics manager, noted that delays this late in the negotiation cycle are rare. “By April 23, this should usually be wrapped up,” he said.

A major sticking point is a $100-per-FEU gap in pricing. While carriers are holding firm at $1,600 per FEU to the West Coast and $2,600 to the East Coast—rates agreed earlier in April—some large retailers are pushing for lower rates, with offers around $1,500 per FEU for West Coast shipments.

“The big guys are on hold,” Parkerson added. “They’re standing their ground.”

Typically, large importers finalize contracts by early April, with non-vessel-operating common carriers (NVOs) following later in the month. Smaller importers and NVOs often operate under contract extensions while negotiations conclude. However, this year, many second- and third-tier importers are holding off signing until the largest retailers finalize their deals, which are expected to set the market floor.

One industry consultant pointed out that while a $100-per-container difference might seem minor, the cost adds up quickly when shipping hundreds of thousands of containers annually.

Despite a 37% drop in Chinese bookings since March 31, spot and freight-all-kinds (FAK) rates remain above current contract levels. As of Wednesday, Platts reported spot rates of $2,067 per FEU to the West Coast and $3,067 to the East Coast.

To keep rates elevated amid falling demand, carriers have announced numerous blank sailings through May. Industry insiders say this tactic will likely maintain upward pressure on spot rates throughout the contract negotiation period.

If major retailers don’t finalize agreements by May 1, carriers are expected to temporarily extend existing contracts. However, if talks continue to stall, a rush to finalize contracts could trigger a rate spike in May.

“You’ll eventually get a bubble,” said the second consultant. “Importers will scramble to sign deals, and rates could surge.”

Source: joc.com