US bucks volume trends - for all the wrong reasons

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232 Section 232, an order that allows the US president to bypass Congress if national security interests are deemed to be at threat, has proved a popular administrative tool for the Trump administration. The latest victims, kitchen cabinets and bathroom vanities, have suffered a 50% levy after the president claimed that foreign firms are flooding the US with such products.

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“The impact on small businesses will be massive. Last year’s strike alone cost small firms over CA$1 billion (or US$719 million). Doing this in the lead-up to the critical holiday retail shipping season is especially troubling.” Dan Kelly, president of the Canadian Federation of Independent Business, hits out at strikes launched by mail carriers in protest at plans to reform Canada Post.

US bucks volume trends - for all the wrong reasons

The global container shipping industry is showing remarkable resilience, according to BIMCO, but there is a catch. Only one region is bucking the trend by suffering significant declines, and, you’ve guessed it — it’s the U.S . U.S.-bound trade lanes are suffering significant declines, according to the BIMCO Container Shipping Market Overview and Outlook for September 2025. On the strength of demand in trade lines not bound for the U.S., “we have increased our ship demand growth forecast for 2025 to 4.5% to 5.5%,” said Niels Rasmussen, chief shipping analyst at BIMCO. BIMCO is predicting, however, that volumes will return to growth in 2026. In the meantime, August data revealed a marginal 0.1% year-on-year increase in inbound container volumes at the 10 largest U.S. ports. Analysts put this down to shippers making use of an exemption for goods in transit after the Aug. 7 implementation of revised reciprocal tariffs. The situation could potentially get worse. Reciprocal tariffs on Chinese imports are paused until mid-November, but could then go into force. This would likely lead to an even steeper decline in volumes, Rasmussen said. And while major ocean carriers have ruled out surcharges related to the incoming USTR ship fees in mid-October, shippers should still be on their guard. Carriers may need to make last-minute adjustments to schedules and deployment in order to ensure they are not caught out by the fees on China-bought or owned vessels. This could potentially lead to last-minute changes and delays. The general gloom in the U.S. is reflected in the NRF’s latest revised projection for 2025, now predicting total inbound volumes to decrease by 3.4%. Major industry stakeholders across the U.S. are making similar pronouncements. The Port of Los Angeles recently predicted a 10% inbound volume drop for September compared to last year. On the positive side, shippers can likely expect spot rates to weaken during 2025, though some analysts are predicting they will stabilize in 2026 .

Crisis looms for US if carriers pull wide bodies

Since the start of the year, air cargo volumes between China and the U.S. have fallen by about 40% between April and July, creating knock-on effects around the world and creating new risks for U.S. shippers . Chinese e-commerce retailers were quick to switch their focus to European countries once the de minimis exemption to the U.S. was ended. As a result, Europe now accounts for 27% of China’s e-commerce market worldwide, up from 21% in May to July last year. The U.S., meanwhile, has fallen from 31% to 15%. However, volumes to the U.S. from locations such as Taiwan and Vietnam are growing rapidly. Between April and July, volumes from Taiwan to the U.S. were up by around 119% year on year. Computer hardware and network equipment accounted for much of the sales, while volumes from Vietnam over the same period were up by around 93% year on year. Cargo capacity deployment is also shifting to match the new developments. Airlines are switching capacity from Asia to Europe and the Middle East, while trans-Pacific and trans-Atlantic capacity remains flat. The big risk for shippers right now is that carriers might start to accelerate this shift. This in turn could lead to a shortage of wide-body freighter capacity in the future. A shortage of aircraft deliveries since COVID is adding to the prospect of a potential capacity crunch. For example, airlines received delivery of 343 wide-body passenger aircraft along with 55 freighters in 2019. Last year, that had shrunk to 139 wide-body aircraft and 29 freighters. Shippers may imagine, therefore, that the only way rates can go on trans-Pacific air cargo is down, but they would do well to prepare for a potential capacity crunch .

The big question: can the market sink any further?

Shippers should prepare for carriers to more aggressively blank sailings on the trans-Pacific trade as they strive to prop up rates . Trans-Pacific container lines are set to accelerate blankings over the next four weeks. They are hoping that by doing so, they will halt the slide in spot rates. These are proving to be unusually soft ahead of Golden Week. According to Sea-Intelligence, carriers are planning to reduce capacity by 13.6% on the Asia–North America West Coast trade and by 14.4% on the East Coast trade. That is up from 3.8% and 4.8%, respectively. Carriers are in a quandary, as previous blankings and GRIs have failed to stem the fall in spot rates, which have sunk by 30% over the past three weeks. Analysts have said they do not expect rates to increase even if the blankings are successful; all they will do is stop further declines. That said, more blankings are potentially likely. eeSea data shows a similar picture, with the maritime intelligence provider expecting almost 17% of capacity from Asia into North America to be blanked in October. The big question now is how close the market is to bottoming out. One possibility is that carriers will continue to pull capacity from the market in Q4, increasing the global idle fleet. After all, once rates sink below carriers’ break-even levels and they are no longer covering their fixed costs, there is little incentive to continue to provide services. Some analysts believe the lower end of container spot rates in the market could already be approaching this bottom-out point .

🤔 Did you know ?

The Port of Los Angeles is seeking to persuade the California Department of Transportation to raise the height of a key bridge project by 26 feet to allow vessels of up to 23,000 TEUs in and out of the port. The projected increase would raise the cost of the bridge from $1.5 billion to $2.2 billion and extend its timeline from 16 to 28 months.

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