US retailers demand Chinese firms pay shipping costs as trade pressure grows
US retail giants are demanding that their Chinese suppliers split or even bear the full cost of shipping goods across the Pacific, as freight rates skyrocket amid the disruption caused by the trade war, sources at Chinese export firms told the Post.
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The move is the latest sign of the intense pressure America's biggest retailers are putting on Chinese factories to absorb more of the additional costs created by the trade war, with the companies facing calls at home to 'eat the tariffs'.
Until recently, it was standard practice for major American retailers to pay the full cost of shipping goods from China to the United States, with the companies able to leverage long-standing relationships with global shipping firms to keep costs low, sources from exporters in eastern China's Zhejiang province said.
But that is now changing. Factories in Zhejiang supplying the US' 'dominant' hypermarket chains are now having to foot part – or, in some cases, all – of the cost of transporting goods to America, according to the sources.
Stage Group, a leading garment maker from Zhejiang, has been paying the logistics costs on 60 per cent of its US-bound shipments since the end of May, a sales representative from the company said.
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