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The Merchant · n°180 · February 19, 2026

Widescale vessel scrapping draws near

Figure of the week

300% US tariff revenues have soared by more than 300% in January 2026 compared to January 2025. Tariff collections this January amounted to $30 billion. The Trump administration’s policy of aggressive tariffs did not go into place until April 2025.

Quote of the week

“The continuing use of tariffs against friend and foe alike combined with the uncertainty of when or if they will be implemented makes trade forecasting very difficult.” Hackett Associates Founder Ben Hackett outlined one reason why import volumes at major US ports are facing a significant year on year decline during H1/2026 according to the latest Hackett/NRF Global Port Tracker report.

Shippers are bearing the bulk of tariff burden - Fed

US importers and consumers are bearing the vast bulk of the costs of the Trump administration’s tariff policy , according to new Federal Reserve data. Fed figures showed that in November 2025, US importers bore 86% of the burden of tariffs. However, foreign exporters began to bear more of the cost as 2025 drew to a close. Consider, for example, that from January to August last year, US importers were saddled with 94% of the cost of the Trump administration’s tariff policies. That sank to 92% from September to October, before falling to 86% in November. The Fed data appears to contradict claims by Washington that foreign exporters would pay for the tariffs. They do, however, square with claims from the Kiel Institute in late January that US importers and consumers were bearing 96% of the tariff burden. Julian Hinz, one of that study’s authors, described the tariffs as an own goal. “The claim that foreign countries pay these tariffs is a myth. The data shows the opposite. Americans are footing the bill.” Yet new figures on the revenues generated by the tariffs highlight how hard it will be to persuade the administration to shift its policies. US Customs data for January showed that tariff revenues had increased by more than 300% year on year (see number of the week). This makes it clear that many of the White House’s policies are likely now dependent on tariff revenues. Shippers are still anxiously awaiting the results of the Supreme Court ruling on the tariffs. Yet Treasury Secretary Scott Bessent has said that even if the court pronounces the tariffs to be illegal, the administration will find another way to impose them. It appears that for now shippers are stuck with tariffs, though their form might easily shift in the short to medium term. Ironically this makes it even harder to engage in forward planning. The big question for many shippers now is whether to pass on the impact of tariffs to consumers . The Fed’s latest study did not shed any light on the extent to which this is happening already.

Air freight markets depart from seasonal patterns

With the start of the Chinese New Year holiday, Trans-Pacific air freight markets are showing their typical seasonal lull, with one difference . Normally, US-bound air freight from China sees a sharp spike in the run-up to the holiday as shippers compress weeks of orders into days, to be followed by a steady slackening of demand. This year, however, the usual spike failed to materialize. That didn’t stop rates from China to North America rising steadily over the past three weeks, but to a lesser extent. Now they have begun to fall. The question of how long and how far that fall will last is an open one. One of the major factors affecting the equation is new freighter capacity. Last week saw a 3% rise in freighter capacity between Asia and the US. Chinese factories start to reopen in early March, which would typically see a moderate rebound in rates. This year it isn’t clear that will take place. One of the factors continuing to drive the market before the holiday was residual e-commerce demand that now appears to be ebbing. Shippers then can probably expect an extended period of low rates. At the same time, the backlog at key US hubs caused by winter storm Fern is still being cleared .

Widescale vessel scrapping draws near

Ocean carriers have sharply increased the number of blanked container sailings but may nevertheless soon have to resort to more drastic measures to prop up rates . A total of 136 sailings have been blanked this month, according to Drewry with the Trans-Pacific trade most heavily affected. Carriers are largely adjusting networks to match the start of the Lunar New Year, which began on 17 February. There is therefore, according to Drewry, a seasonal pattern to the blankings. Nevertheless, weak structural demand and an influx of capacity are likely to mean that carriers will continue to cancel sailings just as aggressively, if not more so into Q2. Carriers have also begun to consider scrapping older vessels due to structural oversupply. Several have already begun to report pre-tax quarterly losses. And with a record 4.8 million TEUs of new ship capacity ordered in 2025, something will have to give. Maersk CEO Vincent Clerc mentioned in an earnings call last week that one potential trigger for widespread scrapping could be a large-scale return to Suez Canal routings. However, Alphaliner said, “the rebound in scrapping would then be deferred to 2027 and 2028, when the colossal amount of newbuilding deliveries expected to hit the water during these two years will force a streamlining of the fleet.” Even then, scrapping remains some way off. Shippers can expect to have to deal with large numbers of blank sailings and slow steaming before that. For now, another factor dampening market activity is that US Customs and Border Protection is closely monitoring imports to ensure compliance with Section 301 and Section 232 tariffs. This means that accurate classification, valuation and documentation remain essential for shippers to avoid clearance delays or penalties .

🤔 Did you know ?

Shippers may have thought they had seen the back of the Trump administration’s port fee plans. But they have been resurrected under Washington’s new Maritime Action Plan. Under the plan, foreign built ships will be charged a per kilogram fee on imported cargo.

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👋 See you next week, The Merchant team

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