Maersk Line, the world's biggest container shipping company, expects less demand in 2019 as US tariffs bite in January, according to Shipping Gazette.
Maersk said the combined effect of all trade restrictions introduced during 2018 could reduce global container trade by 0.5 per cent to two per cent during 2019-20.
"We expect to see a lull as the tariffs come into effect while everybody is trying to figure out how they will structure their supply chain going forward," said Maersk Line chief commercial officer Vincent Clerc.
"We expect to see a significant slowdown in demand of imports into the US" as many shippers have accelerated purchase orders to get goods into the US before the higher rate kicks in. he said, reported American Shipper.
"As we see a stronger demand now, we expect to see a lull as the tariff comes into effect while everybody is trying to figure out how they will structure their supply chain going forward," Mr Clerc said.
He said Maersk will deal with this expected reduction in demand by taking capacity out in the transpacific market around the Chinese New Year "to make sure that we have right-sized our network for lower demand and can keep ourselves in line with what our customers expect."
Mr Clerc said other trade routes have yet to be affected by trade tensions.
"The fact that we're underweight market share-wise in the Pacific is actually something that that comes in quite handy right now," he said.
Maersk cited other factors signalling reduced demand for container transport: A sharp slowdown in global growth because of tightening US monetary policy; investors taking an increasingly risk-off attitude toward some economies; vulnerability of emerging economies to fluctuations in the US dollar and to the economic development in the US via their financial leverage."
Also the outcome of the Brexit negotiations, which Maersk says poses a risk to United Kingdom container trade. Last week the UK Chamber of Shipping welcomed reports that the UK government and the European Union have reached agreement on the UK's withdrawal.
Said chamber CEO Bob Sanguinetti: "Maintaining frictionless trade between the UK and the European Union is the absolute priority. This withdrawal agreement appears to achieve that, to the benefit of businesses and consumers alike."