Exporters confuse to ship goods as US tariffs to come effect on April 9
NEW DELHI : With the US reciprocal tariffs set to take effect on April 9, there is likely to be a last-minute scramble for space on board ships and air carriers to transport US-bound goods. This is because of a provision in the announcement that the new tariffs take effect on April 9, and if goods are bound for the US before 12:01 a.m. on April 9, they can be exported at the old duty structure.
Capt KG Ramakrishnan, a former master mariner, says the situation is like filling petrol in a bike at 11 p.m. because tomorrow, the price is going up by Rs 10 from 12.01 hr. Such drastic changes have not happened globally for a long time. However, export or import bans do create a rush, which is justified, he added.
This time, the timeline is too short to get on board, said Israr Ahmed of Chennai-based Farida Group, a leading exporter of leather goods and past Vice President of FIEO. Every time there is a change in tariffs, it’s not applicable if the goods are already on board, he added.
CK Govil, CMD at Activair and President of The Air Cargo Agents Association of India (ACAAI), the national association representing the air cargo industry in the country, says most of the exporters had planned to have the goods shipped to reach by April 2 – before the announcement day. “There was a lot of rush to get the goods delivered by 2nd. I don’t foresee any scramble now,” he added. Govil also noted that cargo flights have been overbooked in the last few days and have hiked freight prices. “The airlines were accepting the shipments on express freight instead of normal freight rates. For example, if the normal freight rate was ₹100, then the airlines were demanding ₹150,” he said.
According to Lars Jensen, an expert in the container shipping industry based in Denmark, the new US tariffs announced by Trump have essentially launched a trade war on the entire world. Shippers will be working overtime in the coming days trying to assess the impact on their business, said Lars. “If the goods need to be in the US before April 9, the gate-in time would then be April 6 or 7 for loading on the 8th. And you risk the vessel being delayed and then getting on later,” he said, explaining the complexities involved.
J Krishnan, Partner of the Chennai-based S Natesa Iyer Logistics LLP, noted that internationally, it is an accepted practice that the date on the Bill of Lading or any other transport document is considered the shipping date, and control over the goods passes from the consignor to the carrier then.