China-to-US container shipments shrink as tariffs bite

Mint

01-05-2025

The volume of Chinese goods packed in containers bound for the U.S. keeps falling as new U.S. tariffs dent demand, with the biggest ocean carriers shifting to smaller ships to move the reduced loads while other companies cancel sailings.
The world's five largest containership operators say bookings for eastbound trans-Pacific shipments are down by at least a third. These biggest carriers say they haven't started canceling sailings outright, yet. But they are replacing behemoths that carry up to 18,000 containers with vessels maxing out at about 14,500 boxes, as measured by the industry standard 20-foot equivalent units.
'As we navigate the evolving market conditions, we will continue optimizing our network utilization by, for example, replacing larger vessels with smaller ones to better align with the current demand situation in some China-U.S. services," A.P. Moeller Maersk said in an emailed statement. The world's second-largest container carrier after Mediterranean Shipping Co. said it has, to date, maintained all its scheduled trans-Pacific sailings.
Smaller operators have cancelled around two dozen sailings from China to the U.S. West Coast so far for May, according to brokers in Singapore and London.
Port of Los Angeles Executive Director Gene Seroka said he expects container arrivals to be down by 30.4% this week from last week. He added that 17 sailings scheduled for May have been canceled so far. The Port of Los Angeles and adjacent Port of Long Beach together make up the biggest U.S. port complex.
'This is the most unpredictable period we've ever been to," Nils Haupt, a spokesman for German carrier Hapag-Lloyd, told The Wall Street Journal. 'It's worse than Covid when logistics chains took months to recover."
Haupt added that container bookings out of Southeast Asia are up by about a quarter, but this amounts to a fraction of the volume that normally comes from China. That shift comes as Chinese manufacturers
that have factories in Vietnam
, Cambodia, Indonesia and other countries move production to that region.
'The Chinese economy has taken the first hit," Deutsche Bank's chief China economist, Yi Xiong, wrote in a report this week. 'The shock to the U.S. economy will be delayed, as those goods will not arrive in U.S. ports until a few weeks later and importers can run on inventories for one to two months."
The Baltic Exchange, which measures the cost of moving commodities worldwide, said carriers will be canceling, or 'blanking" sailings rapidly, reminiscent of the pandemic period. 'Importers are relying on built-up inventories and bonded U.S. warehouses to wait out the tariff hike," it said.
The U.S. imported around 11 million containers from China last year, about 38% of all imports, according to customs data. Shipping executives estimate the tariffs have so far cut that volume by about 300,000 boxes.
Carriers say they hope tariff negotiations with China will be settled over the next couple of months. This would allow container demand to pick up during the peak summer season, when importers could make up for cancelled or delayed orders since President Trump ratcheted up tariffs on Chinese imports to 145% earlier this month.
Even if China and the U.S. reach a deal on tariffs, it would take more than a month for revived cargoes to start coming out of China, said Peter Sand, chief analyst at shipping-research firm Xeneta. He added that freight rates from Vietnam to the U.S. West Coast now cost $200 more per box, up from nearly being equal with Chinese rates at the end of March.
'Cargo volumes are very weak out of China, with volumes down by up to 50%," maritime intelligence platform Linerlyitca said in a client note this week. 'The recovery in southeast Asian volumes to the U.S. has not been sufficient to make up for the overall transpacific shortfall."
Write to Costas Paris at [e-mail]