Major U.S. retailers are insisting that their Chinese suppliers either divide or shoulder the entire expense of transporting products across the Pacific Ocean due to soaring freight costs triggered by disruptions from the trade conflict, according to insiders at Chinese exporting companies who spoke with the Post.
This development underscores the significant pressure being exerted by America’s largest retailers on Chinese manufacturers to shoulder a greater portion of the extra expenses arising from the trade war. These businesses are under domestic scrutiny to “absorb the tariffs” rather than pass them on to consumers.
Up until recently, it was common for large U.S. retail corporations to cover the entire expense of transporting products from China to America. These businesses could maintain lower costs thanks to their longstanding connections with international logistics providers, according to sources within export industries in Zhejiang Province, located in eastern China.
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But that is now changing. Factories in Zhejiang supplying the US' "dominant" hypermarket chains are now having to foot part - or, in some cases, all - of the cost of transporting goods to America, according to the sources.
Since late May, Stage Group, a prominent apparel manufacturer based in Zhejiang, has been covering the logistics expenses for 60 percent of their exports destined for the United States, according to a statement made by one of the company’s sales representatives.
Shipping expenses aren't the sole aspect putting pressure on China's manufacturing sector. Early last month, insiders informed the Post that American merchants were urging their Chinese vendors to cut costs. up to 66 percent of the shoulder Of the expenses related to U.S. tariffs, which were formerly covered by American purchasers.
The conflict regarding shipping expenses seems to have started after the tariff ceasefire agreed upon by Beijing and Washington in mid-May, resulting in both parties not imposing new tariffs on each other. agree to significantly reduce taxes with one another's products for three months.
The temporary deal triggered an increase in demand For cargo containers, U.S. retailers hurried to preload as many shipments from China as they could before the truce ends, causing shipping expenses to soar.
Several ocean freight forwarding firms are currently asking between $6,000 and $7,000 per container for shipments along the U.S. West and East Coast routes throughout the remainder of June. This price is nearly twice as high as what was quoted at the end of May.
According to sources cited by the Post, last month, the price for transporting a container from the Ningbo-Zhoushan Port in Zhejiang to U.S. West Coast ports such as Long Beach, California, surged to $3,000. This figure represents a threefold increase compared to rates observed in April, when elevated U.S. and Chinese tariffs led numerous retailers to suspend their deliveries.
For Chinese exporters, the worry is that numerous businesses—particularly smaller suppliers—are likely to find it difficult to handle increased shipping expenses. Industries such as clothing manufacturing, which typically operate on tight profit margins, faced challenges even prior to the trade conflict. Now, escalating costs are forcing these companies to their limits.
It is anticipated that freight expenses will stay significantly higher than usual for an additional few weeks. This is due to shipping companies continuing efforts to restore the operational capabilities they cut back in April, as stated by a manager from the Zhejiang division of the Chinese transportation company Sinotrans.
Certain exporters are still struggling to obtain container reservations because of the increased demand, whereas some have had their products detained at congested ports inundated with an unexpected influx of cargo, according to a report from the local news source Zhejiang Daily on Saturday.
The shipping behemoth Maersk reduced its US-directed capacity by 20% in April. The firm’s top officials disclosed at a recent maritime conference in Zhejiang that they are now focused on expanding their fleet once more.
The Ningbo-Zhoushan Port, ranked as the globe’s third-biggest container terminal, is swiftly addressing an influx of export requests. This surge has intensified due to the trade tariffs ceasefire aligning with U.S. retail businesses replenishing their inventory during the customary busy period leading up to the holidays.
Ships plying US routes will be given priority in docking and loading, and the port is also looking at ways to shorten docking times to increase capacity.
Teng Yahui, a high-ranking official from the Zhejiang Seaport Group, which operates the port, mentioned that they are making additional space available at their docks to accommodate cargo destined for the United States. This initiative aims to assist companies in reducing their transportation expenses.
According to Teng, ports in Zhejiang are expected to resume normal operations for US exports by mid-June.
In April, Ningbo’s exports to the United States dropped over 25% compared to the previous year, following an increase of 12.6% year-over-year for the initial quarter of 2025. However, shipment volumes rebounded starting from May, aiding efforts to stabilize the regional economy, as stated by local authorities.
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The article initially appeared on the South China Morning Post (www.scmp.com), which is the premier source for news coverage of China and Asia.
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