The Merchant · n°143 · April 24, 2025

Trans-Pacific bookings slide despite tariffs

🚢 The illusion of stable rates?
🇺🇸 Port calls and counter-calls
✈️ Trouble ahead for air freight

Figure of the week

409% This is the extra cost of a 3,620 TEU containership built in the United States compared with an equivalent vessel built in South Korea, according to Lars Jensen (CEO, Vespucci Maritime).

Quote of the week

“Thousands, then millions, of small American businesses - including many iconic brands - will go bankrupt this year if tariff policies toward China do not change.” Ryan Petersen, CEO of Flexport, on X on April 17.

A deceptive situation?

The tariff escalation between Beijing and Washington has triggered an unprecedented wave of blank sailings on the trans-Pacific route. The levels reached during the 2020 pandemic have been surpassed. According to Sea-Intelligence’s Blank Sailings Tracker, more than 80 crossings were canceled in April, compared with 51 in May 2020. Between Europe and the United States, flows are holding up, according to eeSea. The 90-day customs truce between the United States and the European Union decided by Donald Trump seems to have reassured professionals. For his part, Peter Sand, chief analyst at Xeneta, sees it as an anticipation strategy: “Shipowners are increasing capacity toward Europe to respond to a possible loading peak ahead of the next tariff salvo.”

The current situation is not without paradoxes. Logistics disorganization and the fall in volumes are not preventing freight rates on the line between China and the West Coast from remaining stable. This is essentially due to two factors: a temporary influx of goods from other Asian countries (Vietnam, Cambodia) before the introduction of new taxes, and a market inertia caused by general uncertainty.

For Judah Levine, analyst at Freightos: “Everyone is waiting to see. Carriers are playing for time.” And they are reorganizing their services while waiting for a possible customs de-escalation. CMA CGM, for example, is launching new links to Mexico. Nevertheless, the short term remains the rule in an extremely volatile tariff context. Strategic uncertainty remains the rule.

USTR: an easing and some questions

The Office of the US Trade Representative (USTR) announced on April 17 a softened version of its initial plan aimed at increasing port calls on companies using China-built vessels. Gone are the millions of dollars per port call originally envisaged. From now on, the fees will be applied per voyage and not per port call, which should limit the cumulative effects that professionals fear. Chinese vessels will pay $50 per net ton of capacity from October 2025. This amount will gradually climb to $140 in 2028. Vessels built in China but operated by non-Chinese companies will also be affected. Exemptions are planned. Vessels under 4,000 TEU will escape the fees; those making short trips (less than 2,000 nautical miles); those under the US flag.

Despite these adjustments, the potential impact of these measures remains high. In China, of course, which has expressed its anger at these measures. In the United States too, where many professionals are worried. For Joe Kramek, president of the World Shipping Council, it is very bad news: “These measures risk driving up consumer prices, weakening agricultural exporters and reducing the attractiveness of our secondary ports.”

According to analysts, only 20% of the current fleet of the affected companies will still be operating on links to the United States in six months. Many vessels will be replaced. But there is no guarantee that the US shipbuilding industry will benefit. The president of the Alliance for American Manufacturing, Scott Paul, defends these decisions as a step toward a “vital rebalancing” at a time when China now produces 1,700 ships per year, compared with fewer than five for the United States.

Yet there is nothing to say it will happen. At the heart of the problem? The astronomical cost of a US vessel. The US shipowner Matson, for example, ordered three 3,620 TEU containerships for a total cost of $1.003 billion, or about $334 million per vessel. In China, the same vessel would cost about $59 million. And $66 million in South Korea… In short, without penalties on port calls, a US containership costs between 4 and 5 times more than its equivalent built in Asian shipyards. And the increases announced by the USTR do not apply to vessels built in Korea and Japan…

Storm at high altitude

The hardening of the customs war and the end of the de minimis exemption threaten the air freight sector, which could lose $22 billion in revenue over three years, according to the firm Cirrus Global Advisors. Iconic companies such as Temu and Shein, which depend heavily on direct delivery from China to American consumers, are particularly exposed. As a result, the anticipated fall in volumes and the pressure on rates could force cargo carriers to reduce their capacity.

At the same time, thousands of small online sellers could be pushed into bankruptcy. It is a real systemic risk since the online commerce sector represents between 50 and 60% of air freight between China and the United States. The announced end of de minimis is already weighing heavily. DHL has already suspended certain B2C shipments to the United States, citing the bureaucratic burden created by the recent decisions of the US administration. Fears related to the confidentiality of the data required for the new customs procedures raise concerns about a decline in cross-border purchases. In short, the e-commerce axis between China and the United States (i.e. 20% of global volume) is in peril. While this could benefit other Southeast Asian countries, such as Vietnam, it will necessarily have an impact on air freight.

👋 See you next week, The Merchant team

Sources

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