Shipping Volumes Plummet in Early April 2025
Data from logistics platform Vizion reveals a drastic drop in container bookings during the first week of April (April 1–8) compared to the previous week (March 24–31). The contraction spans global trade lanes, with a significant impact on US-China maritime routes:
- Global TEU bookings fell by 49%
- US imports dropped 64%
- US exports decreased 30%
- US imports from China plunged 64%
- US exports to China declined 36%
This decline follows the April 2 announcement of a 10% baseline tariff on all US imports, combined with a 34% additional tariff on Chinese goods, effectively creating a 54% total tariff on Chinese imports.
The fallout underscores growing volatility in international trade and maritime logistics. With tariffs disrupting containerised trade flows, global supply chains now face higher costs, longer delays, and shifting alliances in the shipping industry.
Freight Rate Movements: A Price Spike Before the Fall?
Contrary to expectations that weaker demand would drive freight rates down, shipping costs spiked just before the new tariffs took effect.
By April 1, 2025, container rates surged:
- China to US East Coast: up 9% to $322/FEU
- China to US West Coast: up 16% to $383/FEU
- Air freight from Vietnam to the US rose 8%, and from China to the US by 5%
According to Xeneta, a global freight market intelligence platform, spot container rates from the Far East to both US coasts jumped ahead of the tariff implementation. However, these same spot rates are still 43% to 49% lower than they were at the start of 2025.
“Liberation Day will not bring a sense of freedom to carriers caught in the crossfire of tariffs,” said Peter Sand, Chief Analyst at Xeneta.
Sand warned that shipping companies and US importers face major challenges in negotiating long-term freight contracts starting May 1. He noted that the ongoing uncertainty in US-China trade relations makes supply chain planning increasingly difficult.
While the tariff surge briefly inflated costs, the broader trend remains downward, with spot rates expected to continue falling due to global overcapacity and slowing trade flows.
The “Frontloading” Effect: A Surge Before the Slump
In anticipation of steep new tariffs, many U.S. importers rushed orders in early 2025, creating a sharp uptick in ocean freight bookings during Q1. This “frontloading” behaviour was a strategic move to beat the April 2 tariff deadline and avoid higher costs.
However, once the tariffs took effect, booking volumes plummeted, signalling a rapid contraction in demand—a trend clearly reflected in recent shipping data.
Sector-by-Sector Impact: Who’s Hit Hardest?
Different industries are absorbing the tariff shock in distinct ways. Here’s a breakdown:
- E-Commerce — Very High Impact
Platforms like Shein and Temu are directly affected by the removal of de minimis tax exemptions for orders under $800. Their cost structure is now under intense pressure. - Pharmaceuticals & Medical Devices — High Impact
These sectors prioritise speed and reliability. While they can absorb higher costs, tariffs still disrupt supply chain flows and budgeting. - Technology & Data Centers — High Impact
Imports of servers, networking gear, and AI hardware have surged, with U.S. firms rushing to secure critical infrastructure before tariffs drive prices up. - Fast Fashion — High Impact
With low price points and razor-thin margins, losing de minimis protections is a major blow. Tariffs could multiply landed costs, threatening profitability. - Toys & Games — Medium to High Impact
Industry players like Steve Jackson Games have warned that 54% tariffs could devastate smaller manufacturers and niche brands.
Shipping Lines Respond to Trade Headwinds
As U.S.-China trade tensions escalate and new tariffs slash demand, global shipping lines are racing to adapt. With freight volumes down, especially on key routes like the trans-Pacific, carriers are deploying aggressive capacity management strategies to stay efficient.
1. Cancellations, Route Cuts, and Strategic Adjustments
The most immediate response has been a wave of blank sailings—scheduled voyages that are canceled to reduce excess capacity.
- A total of 47 blank sailings have been announced, heavily concentrated on trans-Pacific and Asia-Europe trade lanes.
- 43% of cancellations are on trans-Pacific routes, mirroring the steep drop in U.S. imports from China and broader Asia.
- HLS Group alone has logged 80 cancellations from China, and the ONE Alliance has indefinitely suspended a major route originally set to resume in May.
2. Vessel String Reconfigurations
Shipping lines are also modifying or scrapping vessel strings—the sequence of ships operating on a given route. This helps align sailing schedules more closely with reduced demand and port congestion scenarios.
3. Subtle Capacity Controls: Slower, Smaller, Smarter
Beyond outright cancellations, carriers are turning to operational tweaks to manage excess capacity without idling fleets:
- Slow steaming: Reducing sailing speed to stretch transit times and absorb capacity.
- Skipping ports: Extending voyage timelines by omitting certain stops.
- Maintenance buffering: Placing ships in dry dock under the guise of scheduled service.
- Downsizing vessels: Using smaller ships on underperforming routes.
4. Downtime Remains Low
Despite the downturn, only 0.2% of the global container fleet is currently idle. This shows that rather than leaving ships docked, carriers are using speed reductions, route tweaks, and flexible scheduling to absorb lower volumes and maintain fleet utilisation.
Regulatory Pressure: USTR’s Proposed $1 Million Port Charge
On top of economic turbulence, the shipping sector now faces fresh regulatory headwinds. The Office of the United States Trade Representative (USTR) has proposed a $1 million port entry charge for vessels built in China. The move, framed as a national security measure, aims to reduce U.S. reliance on Chinese-built ships.
But the backlash has been swift.
U.S. exporters, port authorities, and logistics unions argue the proposal would backfire, raising operating costs, disrupting trade flows, and risking domestic maritime jobs. Critics warn it could hamper U.S. exports just as shippers are already dealing with falling demand and tariff-driven uncertainty (Reuters).
Freight Rates: Complex, Diverging Trends
Freight pricing is in flux, with contrasting dynamics across transport modes and even between shipping indices.
Ocean Freight: Mixed Signals
- The Shanghai Container Freight Index (SCFI) has fallen 17% since January 2025, and over 55% since its December 2024 peak, now hovering at stabilised, lower levels.
- Meanwhile, the Drewry World Container Index reports a spot rate of $5,318 per 40ft container, up sharply from $1,536 a year ago.
This discrepancy suggests a split market: rising rates on specific high-demand lanes, possibly due to pre-tariff frontloading, versus a general downward trend as volumes fade.
Air Freight: Demand Surge Drives Spike
- Global air cargo spot rates surged 37% in March alone, hitting $4.14/kg, the highest level of 2025.
- The China–U.S. route mirrored the global average with a 37% increase, while the Europe–U.S. lane saw a smaller 7% rise to $2.61/kg.
This spike is largely driven by companies in technology, pharmaceuticals, and data infrastructure, rushing to air freight goods before tariffs took effect in April—especially on China-origin shipments.
Port Congestion Persists Despite Volume Drop
Even as container volumes drop on U.S.-bound routes, port congestion remains elevated globally, suggesting a mismatch in port infrastructure readiness and supply chain fluidity.
- Global port congestion exceeds 10%, with over 20 vessels waiting on average at major ports.
- Europe is a hotspot: over 935,000 TEUs are stuck at Northern European and Mediterranean ports, making up 32% of global backlogs.
Most Severely Affected Ports:
Istanbul, Singapore, Chittagong, and Shanghai remain bottlenecks.
Specific waiting times:
-
- Algiers: Improved, now 5 days (down from 7).
- Djen-Djen: Average 3 days, peaking at 14.
- Bejaia: Up to 8 days.
- Cape Town: 8–10 days, affected by winds.
- Durban: Stable at 1 day.
Bright Spots:
- Congestion has eased at Hamburg and Rotterdam.
- PSA Antwerp has improved flow by cutting its export delivery window by 5 days, helping streamline outbound movement.
Ports and Businesses Grapple with Ongoing Disruption
The sharp drop in container traffic to North America, combined with volatile freight rates and inconsistent port congestion, continues to strain both ports and businesses.
- Ports must adapt to shifting cargo flows, driven by changing trade patterns and route cancellations.
- U.S. businesses are facing supply chain uncertainty, with challenges in planning inventory, managing costs, and selecting reliable logistics partners.
Adding to the complexity, negotiations for new long-term ocean contracts, effective May 1, are forcing importers to make high-stakes decisions amid unstable market conditions.
Conclusion: Navigating an Era of Adjustment
The global shipping industry is undergoing a fundamental reset in response to U.S.–China trade tensions and new tariffs. Key trends include:
- Carriers are cutting capacity through blank sailings and slow steaming.
- Air freight surging temporarily as shippers race to beat tariff deadlines.
- Ocean spot rates are diverging across indices and trade lanes.
- Port congestion is persisting in Europe, Asia, and parts of Africa despite falling volume.
Across the board, uncertainty is the dominant force, pressuring stakeholders to stay agile, rethink sourcing, and diversify logistics strategies in a volatile landscape.
