Ocean shipping on trans-Pacific trade lanes seems to be caught between bipolar moments as it struggles with successive periods of disruptions while it tries to adapt to major swings in import volumes triggered by unexpected changes in U.S. tariffs.
First came President Trump’s April 2 “Liberation Day” announcement that cast 145% tariffs on Chinese imports. Then, on May 12, the administration pulled back, calling for 30% tariffs—but only for a 90-day “trial” period.
“The high import tariffs announced on April 2 had already caused a collapse in ocean borne transpacific shipments of some 30%,” reports Philip Damas, managing director, head of Drewry Supply Chain Advisors. “Many U.S. importers and Asian exporters decided that the tariffs were prohibitive and that they had enough inventory at destination to wait for a few weeks for the situation to be clarified or just could not afford the tariffs.”
This shipping “freeze” phase lasted until about week 18. During that time, ocean carriers cancelled about 25% of their trans-Pacific sailings and announced deep reductions in shipping capacities. Port congestion eased.
“But the situation changed in weeks 19 to 20 [early May] when the Trump administration lowered tariffs on imports for 90 days, causing another shock to the shipping system, says Damas. “Volumes then bounced back by an estimated 50% month-on-month, spot freight rates soared by 30% or more, and port congestion returned with a vengeance. Our beneficial cargo owners and importer customers told us recently that there’s a lack of shipping capacity, and the carriers are now trying to impose ‘peak season surcharges.’”
Peter Sand, chief analyst at Xeneta, notes that given the average 22-day transit time on the trans-Pacific trade, shippers will take advantage of the 90-day window to ship as many goods as possible into the U.S. and this will put upward pressure on freight rates.
“It takes time to shift capacity back again, so a revival in volumes from China to the U.S. may mean shippers have to pay more in the short term,” says Sand. This will especially be the case given that the third quarter is traditionally peak season for ocean container shipping.
“The uncertainty of future tariffs means that many importers will likely try to rush shipments just before the tariff pauses expire in July [for countries other than China] and in August [for China],” Damas says. “After that, there could be a collapse of volumes and rates.”
