Drewry: US Trade Uncertainties Could Cause Global Container Volumes to Shrink

That volume includes the handling of all loaded and empty containers combined, as well as transshipments.

"There are going to be very few, if any, upsides for container shipping from this trade war," Simon Heaney, Drewry's senior manager for container research, said during an April 24 webinar on Drewry's container market outlook. "Certainly, other countries will do more trade with one another, but any gains from this or new market disruptions, such as port congestion or temporary capacity shortages on really fast-growing trade routes, we think will be small when compared to the wider contraction in the overall demand for their services."

Even now, the tariffs are causing some tangible disruptions to the global container market, such as more blank sailings for U.S.-facing trades, according to the firm.

Because numerous shippers are pausing shipments and assessing the impact of tariffs, there could be a big reduction in container volumes in April and possibly May, according to Philip Damas, Drewry managing director and head of supply chain advisors.

However, blank sailings are only a stopgap measure for ocean carriers, who will need to consider a more holistic downsizing of their fleet should demand destruction continue, Damas said.

If shippers decide whether to replenish their inventory and pay the tariffs, there could also be more front-loading occurring in late June and July, but before October, when additional fees will be assessed at U.S. ports, Damas said.

Indeed, recent data and comments from Port of Los Angeles officials allude to a possible drop in container traffic at the busiest port in the U.S.

"Importers are still bringing in what may be the end of the extra inventory ahead of these tariffs, and we could see a drop-off in volume starting as early as the month of May," Port of Los Angeles Executive Director Gene Seroka said during the port's recent monthly news briefing.

He continued, "Traditionally, the second quarter marks the period when importers and retailers begin to stock up on specialty goods. Think of spring and summer fashion, as well as back-to-school items. I expect that we'll see some of that cargo arrive over the next couple of months before overall volume starts to ease because of these new policies."

Seroka added that the port could see "a drop of at least 10% in our cargo volume from July until the end of this year."

The Los Angeles port processed over 385,000 twenty-foot equivalent containers of imports in March as companies sought to front-load cargo as a hedge against tariffs, Seroka said. The port also moved over 122,000 TEUs of exports, down 15% from March 2024, "as counter tariffs on exports begin to take effect," Seroka said, and the port processed nearly 270,000 TEUs of empty containers bound for Asia. Empties volume in March was 21% higher than a year ago.

Drewry's Heaney said contributing to the 1% contraction in container port handling in 2025 is an anticipated 5.5% decline in container port handling in North America and a 4.8% decline for China.

In 2026, Drewry also expects a 4.6% decline in North American container port handling, but a 1.6% increase in Chinese container port handling.

"We do expect [China] to get back on the growth track much sooner than North America as it will be able to find new markets" in 2026, Heaney said.

There were two other times since Drewry began collecting data in 1979 when container port handling fell year-over-year. Those two times consisted of a 0.9% decline in 2020 because of the COVID-19 pandemic and an 8.4% decline amid a global economic recession, according to Heaney.

"The outlook for container shipping is even more uncertain now than at the onset of the COVID pandemic. The difference is that the world fairly quickly got to grips with the risks that COVID presented, and once it was fully understood, we were able to very quickly plot a recovery path though in a remarkably short space of time," Heaney said.

"However, this time around, none of Trump's decisions or executive orders relating to trade have any quality of permanence, and in that environment, business shrivels and very few are prepared to make significant investments. So in the absence of any sort of coherent master plan, we're left trying to decipher the end game strategy for ourselves," Heaney continued.

Because of the anticipated changes in trade activity affecting U.S.-bound cargo, as well as the Office of the U.S. Trade Representative's Section 301 remedy calling for foreign-built vessels to be charged a fee starting in October for docking at a U.S. port (see 2504180018), "container shipping to and from the U.S. [is going to be] much more expensive," Heaney said.

When looking at what goods in the U.S. will be impacted the most by the tariffs, consumer/retail products, industrial products and furniture could be the most affected by the tariffs, as they stand today, since China dominates U.S. imports for these goods, according to Damas. China has a 50%-58% import share of these products, based on total imports from 15 major countries.

Damas also said that neither the Asian producers nor the U.S. importers will be able to absorb high tariffs, which could mean that consumers may be charged more, or companies may decide to stop importing and exporting certain products to and from the U.S.

"Cambodia and Vietnam, which specialize in producing discretionary consumer goods, are very exposed to the new U.S. tariffs and can expect to see declining volumes to the U.S.," Damas said, quoting a slide. "Singapore, which specializes in producing industrial goods, and the Philippines, strong in exporting food products, are less exposed to reduced U.S. consumption caused by tariffs."

Drewry also estimated that U.S. imports from China could fall by 40% if two-thirds of current tariffs become permanent tariffs, while imports from other countries could grow by about 15%.

"The question is, is this going to be a destruction of demand or a shift of sourcing away from China?" Damas said.

Shippers are also mulling shifting production to countries with lower tariffs, such as Turkey, India, Brazil, Vietnam, Malaysia and Poland, Damas said, and as a result, container volumes might rise from these countries.