The volume of Chinese goods shipped to the U.S. in containers is declining rapidly, driven by the latest round of U.S. tariff hikes that have significantly dampened demand. In response, the world’s largest ocean carriers are scaling back operations—opting for smaller vessels and in some cases canceling sailings altogether.
The top five containership operators report that bookings for eastbound trans-Pacific shipments have dropped by at least one-third. While these carriers have not yet fully canceled sailings, they have started replacing ultra-large vessels that typically carry up to 18,000 TEUs (twenty-foot equivalent units) with ships that hold around 14,500 containers.
“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,” said A.P. Moller-Maersk, the world’s second-largest container carrier, in an official statement. Maersk has so far maintained its scheduled trans-Pacific routes.
Meanwhile, smaller operators have already canceled approximately two dozen sailings from China to the U.S. West Coast for May, according to shipping brokers in Singapore and London.
Port of Los Angeles Executive Director Gene Seroka noted a sharp drop in activity, expecting container arrivals to fall by 30.4% this week compared to the previous one. Seventeen sailings have already been canceled for May at the nation’s busiest port complex, which includes both the Ports of Los Angeles and Long Beach.
“This is the most unpredictable period we’ve ever seen,” said Nils Haupt, spokesperson for German shipping giant Hapag-Lloyd. “It’s worse than during the COVID-19 pandemic, when supply chains took months to stabilize.”
Though container bookings out of Southeast Asia have risen by about 25%, they still represent a small fraction of the usual volume sourced from China. This shift reflects a growing trend of Chinese manufacturers relocating production to Vietnam, Cambodia, Indonesia, and neighboring regions.
“The Chinese economy has taken the first hit,” wrote Yi Xiong, chief China economist at Deutsche Bank. “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. Importers may rely on existing inventories for one to two months.”
The Baltic Exchange reports that carriers are now rapidly blanking sailings—canceling scheduled routes—similar to what occurred during the early pandemic stages. U.S. importers are leaning on built-up inventories and bonded warehouses to ride out the tariff increases.
According to customs data, the U.S. imported approximately 11 million containers from China last year, accounting for 38% of total container imports. Shipping executives estimate that the newly enforced tariffs have already reduced that figure by around 300,000 containers.
Carriers are cautiously optimistic that trade negotiations between the U.S. and China may resolve in the coming months, potentially boosting demand in time for the peak summer shipping season. Importers are hoping to recover from delayed or canceled orders since tariffs on Chinese imports were increased to 145% earlier this month.
Even if a trade agreement is reached, it would take over a month for shipment volumes from China to rebound, said Peter Sand, Chief Analyst at Xeneta. He also noted that freight rates from Vietnam to the U.S. West Coast have increased by $200 per container, surpassing Chinese rates which were nearly equal just weeks ago.
“Cargo volumes are very weak out of China, with volumes down by up to 50%,” maritime intelligence platform Linerlytica noted in a recent client update. “The recovery in Southeast Asian volumes to the U.S. has not been sufficient to make up for the overall trans-Pacific shortfall.”