Deep Sea Freight Transportation NAICS 483111

May 5, 2025 - US Import Volumes Plummet

• Import volumes into US ports from China have plummeted because of Trump administration tariffs, with cancellation of orders running at 50% at the end of April 2025, according to global logistics giant Flexport. Shipping companies have been cancelling sailings from China at a 20-30% rate each week, threatening shortages for US retailers of low-margin consumer goods like toys, clothing, shoes, and sports apparel. At the Port of Los Angeles, the main entry point for Asian goods into the US, ship traffic is down significantly, falling 30% in the last week of April from the week prior. According to the National Retail Federation, the back half of 2025 will see a 20% year over year cargo import decline for the US. Consulting firm Drewry estimates that the US trade war will cause a 1% drop in container volume globally by the end of the year.
• The on-again, off-again tariff uncertainty of the Trump administration is causing freight importers headaches in not only increased and unexpected costs, but in operations and financial planning as well. Businesses have been all over the place stockpiling goods ahead of tariffs, pausing shipments altogether, or raising prices. The main US entry points for Chinese goods - the ports of Los Angeles and Long Beach in California - saw a 25% increase in import containers in January as goods were stockpiled. Canadian and Mexican factories grew inventories at record levels in December and January, before leveling off and even falling in February as US companies rushed to import goods. Freight forwarder Kuehne + Nagel reports that cross-border trade between Mexico and the US fell sharply at the end of 2024 in preparation for tariffs and have still not rebounded.

• Attacks on cargo ships in the Red Sea and drought affecting the Panama Canal have created a “perfect storm” of disruption in global shipping, according to Mike Giambrone, an account executive at logistics provider OEC Group. The Red Sea is a critical shipping lane for cargo traveling through the Suez Canal, which accounts for about 12% of global trade, according to Giambrone. Approximately 30% of global container traffic traverses the Suez Canal, transporting $1 trillion of goods per year, according to the Government of New Zealand. Drought conditions in the Panama Canal, worsened by a severe El Nino, have severely impacted container ship traffic through that key trade route. October 2023 marked the driest October on record for the Canal watershed, according to the Panama Canal Authority, and officials have cut the number of transits. The Panama Canal accounts for about 7% of global seaborne trade, according to the Wall Street Journal. “It’s really the East Coast and Gulf Coast markets that are going to see the results of this,” Giambrone said. He noted that when there’s a problem on the East Coast, shippers can transfer their capacity to the West Coast, but this can bring additional problems. Giambrone cited the post-COVID shipping surge that resulted in “a parking lot of container ships” at West Coast ports in 2021. Some ships were diverted to the East Coast to ease the congestion. “Then the East Coast started having serious congestion.”
• US waterway tonnage increased 2.3% year over year but decreased 2.9% month over month in June, according to the US Bureau of Transportation Statistics. Deep sea freight transportation firms slightly decreased their prices during the first nine months of 2024, according to the US Bureau of Labor Statistics (BLS). Water transportation industry employment remained near 10-year-high levels in September 2024, according the BLS.