The Harbinger of Things to Come?

In this week’s Roar: Tariffs, the Panama Ports Company, fees on Chinese-built ships, the drop in diesel prices, the impact of gaps in visibility, and February’s PMI.

Tariffs remain the most important story in supply chain. Last week was full of changes and new announcements – click here for an update by Jaguar Freight.

Hong Kong-based CK Hutchison Holdings recently announced its intent to sell a 90% stake in the Panama Ports Company, raising concerns about escalating US pressure on Chinese investments. The US has been actively working to limit China’s global influence, such as its Belt and Road Initiative and its control over critical assets like the Panama Canal. The sale of the Panama Ports is seen as caving to this pressure—although CK Hutchison asserts it’s simply a business decision. Analysts feel that geopolitical tensions may prompt other companies and countries to assess or reassess their own dealings with Chinese investments.

The CEO of MSC is warning that the US proposal to impose fees of up to $1 million per port call on Chinese-built ships could have a detrimental impact on transatlantic container trade. He explained that the fees would increase operational costs, particularly for Asia-U.S. East Coast services, where the added cost could reach $4 million per service, raising shipping expenses by approximately $800 per 40ft container. This could lead carriers to withdraw services from certain trade lanes.

The benchmark diesel price is down for the first time in five weeks, dropping 6.2 cents a gallon to $3.635. The drop was influenced by a heavy sell-off in global oil markets in response to the news that OPEC+ plans to increase production starting in April. Production cuts have been in place for nearly two years, and the decision, which came as a surprise to many, led to a drop in Brent crude oil prices.

Blind spots in the industry are costly. Businesses end up facing challenges from disruptions, tariffs, and geopolitical shifts, often without fully understanding gaps in their supply chains. Gaps in visibility and outdated management tools can leave them vulnerable to financial losses. These blind spots can further hinder how they deal with the challenges, compounding the issue and potentially hiding costly inefficiencies. The solution? Gaps need to be addressed with a technology overhaul, and businesses need to consider solutions that best suit their needs.

The newest edition of the Manufacturing Report on Business states that manufacturing saw gains for the second straight month. The PMI was 50.3 in February, pointing to a slight expansion. However, new orders declined, employment contracted, and production levels were mixed. Tariff concerns continue to be a major theme, based on 65% of comments from the Institute for Supply Management (ISM) panel respondents. However, despite these challenges and concerns, the manufacturing sector appears relatively stable—for now.

For the rest of the week’s top shipping news, check out the article highlights below.