As tariffs wreck China-US exports, container rates weather storm

While the U.S.-China trade war has sent shockwaves through the supply chain, trans-Pacific container rates are benefiting from evolving carrier strategies.

The imposition of a minimum 145% tariff on all goods from China has led many U.S. importers to cancel orders and pause shipments, said Judah Levine, head of research for shipping analyst Freightos, in an update. This dramatic shift comes as importers hope for a de-escalation in tensions and lower tariffs through direct negotiations between the two countries, which have not yet officially begun.

Levine said the impact on China-U.S. ocean freight demand has been substantial, with reports indicating drops ranging from around 30% to more than 50% in recent weeks. Gene Seroka, executive director of the Port of Los Angeles, the busiest U.S. container terminal, told CNBC that volumes will drop 35% next week. In response, carriers are taking aggressive measures to balance supply and demand. A significant share of China-North America sailings are being blanked, or canceled, while entire service loops are being temporarily halted.

Estimates suggest 28% of trans-Pacific capacity to the West Coast, said Levine, and 42% to the East Coast will be removed in the coming weeks.