Global Trade Faces Redesign as Logistics Crisis Deepens, Expert Warns at Intermodal Summit

The ongoing U.S.-China trade war, rising geopolitical tensions, and mounting logistical bottlenecks are reshaping the global trade landscape. Lars Jensen, one of the world’s leading experts in maritime transport and logistics, warned during his keynote address, “Excellence in Logistics—What Brazil Needs to Overcome to Advance,” delivered at the Interlog Summit, part of the Intermodal South America event held in São Paulo.

Jensen explained how tariffs as high as 200% on imported commodities and vague rules of origin create a hostile environment for global trade. In the U.S., for instance, products partially manufactured abroad—like Nike shoes made in Vietnam—may or may not receive tariff exemptions based on subjective criteria such as design or intellectual property. “This lack of clarity on what qualifies as ‘U.S.-added value’ is jamming the system,” he noted.

The expert emphasized that the U.S. Customs and Border Protection (CBP) lacks the operational capacity to manage the volume of exemption requests under such ambiguous criteria, creating bottlenecks that ripple across the entire supply chain.

Red Sea Crisis Adds Pressure — and a Potential Shock

Another primary concern raised by Jensen was the ongoing crisis in the Red Sea, where global shipping lines continue to avoid the region due to persistent security threats and political instability. “Longer, less efficient routes are absorbing global capacity. Even with retaliatory airstrikes, the perceived risk is still too high for vessels to return,” he said.

This forced rerouting is driving up costs, causing delays, and reducing shipping capacity—directly impacting global trade flows and supply chains across multiple industries.

The system may not recover smoothly if the Red Sea suddenly reopens for navigation. According to Jensen, the sudden resumption of regular routes would overwhelm European terminals with a backlog of ships from Asia—double the usual volume—creating a logistical bottleneck lasting up to four months.

Shipping lines would likely refuse to take on empty containers to stay on schedule. Anticipating this, terminals would begin refusing empty returns, pushing the issue downstream to shippers and consignees. This would likely spark a wave of disputes over demurrage and detention fees.

The situation could deteriorate further as empty containers fail to return to Asia, leading to a shortage of equipment for outbound shipments—and inevitably, higher freight rates. “I guess the shipping lines won’t mind that,” Jensen remarked with irony.

U.S. Considers Heavy Taxes on China-Linked Vessels

Jensen also highlighted potential legislation in the U.S. that would impose taxes of up to $10 million per port call on vessels operated by or built in China. This has already triggered movement among major carriers. The Ocean Alliance—which includes China’s COSCO, CMA CGM, and Evergreen—is reportedly considering shifting its operations to non-Chinese affiliates to avoid the charges.

New Rules to Hit Low-Value Shipments

Even low-value e-commerce shipments will be affected. Starting in May, packages under $800—previously duty-free—may face taxes of up to 120% or fixed rates ranging from $100 to $200, depending on the carrier. Companies like FedEx, DHL, and UPS will have discretion over which regime to apply, adding further complexity for global retailers and logistics operators.

Long-Term Planning No Longer Viable

Jensen was blunt about the implications of such volatility: long-term strategic planning is no longer feasible. “Today, companies don’t build five-year plans. They solve one crisis at a time, week by week,” he said.

He stressed the need for supply chain diversification and new trade agreements—such as the one under discussion between Mercosur and the European Union—as key strategies moving forward. “Brazil has a major opportunity to reposition itself globally, but it must tackle its internal logistics challenges,” he concluded.

The Interlog Summit, where Jensen delivered his speech, gathered logistics leaders and experts as part of Intermodal South America, the largest logistics event in Latin America.

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