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If your business relies on container shipping from China, it’s time to pay attention—shipping costs are about to take a significant leap. Brands should prepare for an additional $600−$800 per container in expenses. And that’s on top of the 20% tariffs already in place.
Yes, you read that right.
For ecommerce and direct-to-consumer (DTC) brands, this is a big deal. Shipping costs are a critical part of your bottom line, and these increases could squeeze margins even further. But before you panic, let’s dive into what’s happening, why it’s happening, and—most importantly—what you can do about it.
Leading ocean carriers are sounding the alarm: proposed U.S. fees on Chinese-built ships (and the companies that operate them) could drive container rates up by 25%.
In late February, the Trump administration introduced a plan to impose escalating fines on companies using Chinese commercial ships. The goal? To reduce China’s dominance in the maritime industry and encourage more U.S. products to be transported on American vessels.
But here’s the catch: carriers often make multiple stops at U.S. ports to unload cargo. If they’re hit with a $1 million fee per port stop, they’ll likely redesign their routes to minimize stops—cutting out smaller ports entirely.
For example, if a cargo ship typically stops at the Port of Long Beach and the Port of Oakland, but now faces a $1 million fee per stop, carriers will likely skip smaller ports like Oakland altogether.
This means brands will face higher costs as additional transportation will be required to move cargo that would have otherwise been offloaded at those smaller ports.
Despite these challenges, direct shipping from China remains the most viable option. Here’s why:
As if that weren’t enough, there’s some good news on the horizon. Air freight rates are declining as companies like Shein and Temu shift their operations to Vietnam. This shift is freeing up capacity and opening up opportunities for other brands to leverage more affordable air shipping options.
The world of supply chain is changing fast, and these proposed tariffs are just the beginning. For ecom and DTC brands, staying ahead means adapting quickly and exploring all available shipping strategies.
Register for our webinar to gain in-depth insights into tariff laws and learn actionable steps to navigate these changes.
Our event will feature expert cross-border tax lawyers as guest speakers. >>
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