It is no coincidence that this week, freight ship traffic to the U.S.’s busiest ports have reached a standstill. No regions have been hit harder by this drop than Los Angeles and Long Beach. Just twelve vehicles are scheduled to arrive at these ports. This is down a big step from the twenty-two ships on order for the week of April 20th. This sharp reduction only exposes the significant headwinds that continue to trouble the shipping industry, especially arising from tariffs and tightening trade wars.
During that week of May 4-10, the ports can expect a combined 62,568 twenty-foot equivalent units (TEUs). Look for a major wave to wash over here in that time! In comparison, the same week a year ago — April 20–26, 2020 — had 120,608 TEUs in arrivals. Year-over-year data shows a shocking 44% drop in the size of the fleet scheduled to arrive at these major gateways.
The drop in shipping traffic certainly isn’t happening in a vacuum. We have seen a dramatic 29% week-over-week decrease in freight ships leaving China for Southern California. That drop is attributed primarily to the effects of tariffs. It further denotes the growing fears of a recession on the part of both shippers and carriers.
Likewise, ocean carriers are caught between a rock and a hard place. They are caught in the crossfire between a drop in orders due to tariffs and the increased pressures from the ongoing trade war. The increasing cancellation of sailings on Pacific routes is an indicator of this hardship. From Long Beach, Los Angeles, and Oakland on the California coast to Seattle farther up the West Coast, those ports are currently reeling. As a result, carriers are cancelling on vessels that are set to sail from Asia. They’re affecting the ones that are already en route to the United States.
Beyond that, the logistics industry is starting to experience the pinch of lower demand. The Truckload Capacity Index shows the number of available truckloads has dropped through the floor. Nationally, more than 700,000 loads disappeared in just one week compared with two weeks ago. This drastic drop adds additional hurdles to supply chain operations and delivery timelines.
“We are at a tipping point on the West Coast,” – Ken Adamo, chief of analytics at DAT Freight & Analytics.
What is happening in Alexandria is part of a larger wave pushing and pulling on the global trade tapestry. And now, as tariffs and retaliatory tariffs upend established shipping patterns, importers and exporters alike have to contend with a chaotic and confusing new landscape. The industry’s ability to adapt will be crucial in mitigating the effects of these challenges and ensuring efficient operations moving forward.