US companies rushing to import their goods from China before the 90-day reprieve on stiff tariffs expires will be socked with an unexpected spike in shipping fees – leading to higher prices on store shelves, The Post has learned.
Major carriers, including Hapag-Lloyd, announced plans to increase shipping rates for a 40-foot container between China and West Coast ports to $6,500 from $3,500, beginning June 1, according to several companies that will be hit by the hike.
The cost for shipping to East Coast ports will rise to $7,500 from $4,500, the sources added.
The increase “will squeeze profit margins and it will result in higher prices for consumers,” said Jay Foreman, CEO of Florida-based toy company Basic Fun, which makes Tonka Trucks.
Typically, shipping represents about 3% of a manufacturer’s cost of goods, according to Foreman, who estimates that the rate increase will double what it costs Basic Fun to ship its toys.
Walmart has already warned that tariffs will result in higher consumer prices even as President Trump warned the discount retailer “eat the tariffs.”
Another shipping rate hike to as much as $8,500 per container is expected by June 15, according to a Journal of Commerce report.
The carriers were accused of gouging to make up for lost revenue after US companies curtailed shipments to avoid paying the 145% tariff imposed on China imports by President Trump last month.
The White House and Beijing reached a trade truce on May 12 that reduces the tariffs to 30% until August 10.
“The ocean carriers are taking advantage of the back-log of shipments” that were left at Chinese ports or factories, Lou Lentine, chief executive of fitness equipment maker, Echelon, told The Post.
Lentine said his freight company told him to expect to pay $6,000 — twice as much to fill up a container with Echelon’s treadmills and other equipment that are made in China and Vietnam.
“It’s a lot,” Lentine said, adding, “We have to ship goods. We have no way around it.”
Even though most importers have negotiated fixed shipping rates, the carriers can slap them with “add-on” fees for peak season surcharges or spot rate increases when volume surges.
“Some of the Chinese ports are full, so they have to get freight out of the country,” said customs broker Bobby Shoule of JW Hampton Jr. & Co., a 160-year old logistics company in Jamaica, Queens.
The proposed rate hikes, announced last week, could possibly be negotiated down by major companies like Home Depot, he added.
But smaller businesses don’t have the same leverage.
“We have no choice but to pay this,” Foreman complained.
“There are no controls or regulations that limit how much these shipping companies can charge.”
The prices for containers are far below what was being charged during the pandemic. They soared to more than $20,000 in 2021.
But the logjam that is expected at the ports in the coming weeks could strain the supply chain to levels not seen since those dark days, Shoule predicted.
The ports are already behind schedule by seven to 10 days, which is how long it’s taking to get containers onto the rail system, he said.
“Once the glut of ships that have been sitting at all the ports in China get loaded up and start moving across the Pacific, the knock on effects will start to kick in,” Foreman also warned.
“These include too many boats hitting the West Coast ports at one time, too many container boxes being out of place, [and a] lag of boats getting back to China to pick up the next waves of product flow for the back half of the year.”
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