The volume of Chinese goods packed in containers bound for the US keeps falling as new US tariffs dent demand, reports the Wall Street Journal.
The biggest ocean carriers are shifting to smaller ships to move reduced loads while other companies cancel sailings.
The five biggest carrier say eastbound transpacific shipments are down by a third, they have not even cancelled sailings yet.
But they are replacing mega ships of 18,000 TEU with 14,500 TEUers.
'As we navigate the evolving market, we will replace larger vessels with smaller ones,' said Maersk in an emailed statement. The Mediterranean Shipping Co (MSC) said it has maintained all its scheduled transpacific sailings.
Smaller operators have cancelled around two dozen sailings from china to the US west coast so far for May, according to brokers in Singapore and London.
Port of Los Angeles executive director Gene Seroka said he expects container arrivals to be down by 30.4 per cent this week from last week.
He added that 17 sailings scheduled for May have been cancelled so far. The Port of Los Angeles and adjacent Port of Long Beach together make up the biggest US port complex.
'This is the most unpredictable period we've ever been to,' said Hapag-Lloyd spokesman Neil Haupt. 'It's worse than Covid when logistics chains took months to recover.'
Mr Haupt added that container bookings out of Southeast Asia have increased 25 per cent, a fraction of what normally comes from China. That shift comes as Chinese manufacturers that have factories in Vietnam, Cambodia, Indonesia and other countries move production to that region.
'The Chinese economy has taken the first hit,' Deutsche Bank chief China economist Yi Xiong. 'The shock to the US economy will be delayed, as those goods will not arrive in US ports until a few weeks later and importers can run on inventories for one to two months.'
The Baltic Exchange, which measures the cost of moving commodities worldwide, said carriers will be cancelling, or 'blanking' sailings rapidly, reminiscent of the pandemic period. 'Importers are relying on built-up inventories and bonded US warehouses to wait out the tariff hike,' it said.
The US imported around 11 million containers from China last year, about 38 per cent of all imports, according to customs data. Shipping executives estimate the tariffs have so far cut that volume by about 300,000 boxes.
Carriers hope tariff negotiations with China will be settled over the next couple of months to allow demand to pick up during the peak summer season.
Even if China and the US reach a deal on tariffs, it would take more than a month for revived cargoes to start coming out of China, said Peter Sand, chief analyst at shipping-research firm Xeneta. He added that freight rates from Vietnam to the US west coast now cost US$200 more per box, up from nearly being equal with Chinese rates at the end of March.
SeaNews Turkey
The biggest ocean carriers are shifting to smaller ships to move reduced loads while other companies cancel sailings.
The five biggest carrier say eastbound transpacific shipments are down by a third, they have not even cancelled sailings yet.
But they are replacing mega ships of 18,000 TEU with 14,500 TEUers.
'As we navigate the evolving market, we will replace larger vessels with smaller ones,' said Maersk in an emailed statement. The Mediterranean Shipping Co (MSC) said it has maintained all its scheduled transpacific sailings.
Smaller operators have cancelled around two dozen sailings from china to the US west coast so far for May, according to brokers in Singapore and London.
Port of Los Angeles executive director Gene Seroka said he expects container arrivals to be down by 30.4 per cent this week from last week.
He added that 17 sailings scheduled for May have been cancelled so far. The Port of Los Angeles and adjacent Port of Long Beach together make up the biggest US port complex.
'This is the most unpredictable period we've ever been to,' said Hapag-Lloyd spokesman Neil Haupt. 'It's worse than Covid when logistics chains took months to recover.'
Mr Haupt added that container bookings out of Southeast Asia have increased 25 per cent, a fraction of what normally comes from China. That shift comes as Chinese manufacturers that have factories in Vietnam, Cambodia, Indonesia and other countries move production to that region.
'The Chinese economy has taken the first hit,' Deutsche Bank chief China economist Yi Xiong. 'The shock to the US economy will be delayed, as those goods will not arrive in US ports until a few weeks later and importers can run on inventories for one to two months.'
The Baltic Exchange, which measures the cost of moving commodities worldwide, said carriers will be cancelling, or 'blanking' sailings rapidly, reminiscent of the pandemic period. 'Importers are relying on built-up inventories and bonded US warehouses to wait out the tariff hike,' it said.
The US imported around 11 million containers from China last year, about 38 per cent of all imports, according to customs data. Shipping executives estimate the tariffs have so far cut that volume by about 300,000 boxes.
Carriers hope tariff negotiations with China will be settled over the next couple of months to allow demand to pick up during the peak summer season.
Even if China and the US reach a deal on tariffs, it would take more than a month for revived cargoes to start coming out of China, said Peter Sand, chief analyst at shipping-research firm Xeneta. He added that freight rates from Vietnam to the US west coast now cost US$200 more per box, up from nearly being equal with Chinese rates at the end of March.
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