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US West Coast import volumes could fall by up to 35%, mainly due to heightened tariffs and geopolitical tensions.
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Carriers are cancelling up to 30% of sailings between Asia and the US to cope with collapsing demand.
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Freight rate volatility is rising, impacting shipping companies and global investors beyond traditional oil price dynamics.
As cargo cranes swing into action at the Port of Los Angeles in early May, the volume of steel and other imports will be significantly lower. UBS data suggests that import volumes into the US West Coast could drop by as much as 35% compared to the previous year, as new tariffs and trade friction take their toll, according to Proactive Investors.
The Impact on Asia-to-US Shipping
At the center of this slowdown is the critical Asia-to-US shipping corridor. Recent quotes from ocean carriers show a mixed trend: spot rates from China to the US West Coast jumped by double digits last week, even as overall shipment volumes fell sharply.
Supply-Demand Mismatch and Canceled Sailings
The shipping industry faces a growing supply-demand mismatch. Carriers are heavily “blanking” (canceling) sailings in response to collapsing volumes. UBS analysts highlight that these cancellations act as a proxy for the decline in shipping activity, estimating that up to 30% of shipping capacity on this key route will be withdrawn over the coming weeks.
Tariffs at the Center of the Storm
President Trump’s latest tariff hike—a massive 145% rate on Chinese imports—is fueling this disruption. While there are hints that the White House may reduce the rate, no clear timeline has been provided. Even a lowered tariff of 60% would still be considered “prohibitive” by many US buyers, according to UBS.
Freight Rate Volatility and Investor Implications
Should trade volumes rebound during the peak shipping season while capacity remains tight, freight rates could surge dramatically, benefiting carriers but burdening importers. For UK investors, the broader takeaway is clear: freight volatility today is driven not just by oil prices or European demand, but increasingly by geopolitical dynamics, affecting companies like Maersk, Hapag-Lloyd, and beyond.
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Source: Proactive Investors
