California Import Volumes, Trans-Pacific Rates Reflect US Trade Policy Volatility
As reciprocal tariffs against imports from China and Hong Kong fall from 125% to 10% for 90 days as the U.S. and China seek to hash out a trade deal (see 2505120006), so are Southern California port volumes and trans-Pacific freight rates reflected the volatility seen in the trade space.
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Late last week, Port of Long Beach CEO Mario Cordero said he expects May imports to tumble more than 10% from April as shippers and importers responded to the U.S. tariffs levied against China and Hong Kong in April.
“After moving the most containerized cargo of any American port in the first quarter of 2025, we are now anticipating a more than 10% drop-off in imports in May -- and the effects will be felt beyond the docks,” Cordero said in a May 15 release. “Soon, consumers could find fewer choices and higher prices on store shelves and the job market could see impacts, given the continuing uncertainty.”
Long Beach Harbor Commission President Bonnie Lowenthal noted how port volumes can reflect the volatility in U.S. trade. "Even as the biggest tariffs were paused, we still should brace for the effects of tariffs following 11 straight months of cargo growth," Lowenthal said.
Long Beach experienced its "strongest April on record," with 867,493 twenty-foot equivalents handled in the month, up 15.6% from April 2024. Of those volumes, imports rose 15.1% to 419,828 TEUs and exports decreased 4.5% to 93,842 TEUs. April also followed 11 consecutive months of cargo increases, Long Beach said.
Meanwhile, the Port of Los Angeles also experienced a record April, handling 842,806 TEUs, 9.4% higher than April 2024. April's figures follow 10 months of year-over-year growth, port director Gene Seroka said in a May 19 release. Loaded imports totaled 439,230 TEUs, 5% higher compared with the previous year, while loaded exports totaled 128,394 TEUs, down 3% year-over-year.
But Seroka warned that these volumes could soften in the upcoming months.
“Moving forward -- at least for the short term -- we will see a softening of global trade during this period of elevated tariffs and uncertainty,” he said.
Market observers of ocean rates for trans-Pacific routes have been noting that blank sailings between Asia and the U.S. West Coast spiked as Trump and China engaged in a trade war and began levying significantly higher duty rates.
"When we look across what was deployed in April and what is scheduled for May combined, blanked capacity accounts for 19% of the total Asia to North America West Coast (NAWC) planned capacity, and 17% of the total Asia to North America East Coast (NAEC) planned capacity, across those two months," Sea Intelligence CEO Alan Murphy said in a May 8 release.
However, since that time, both the U.S. and China lowered their tariff rates -- although they didn't remove them completely -- which in turn has sent importers scrambling to resume shipments before the 90-day reprieve ends on Aug. 12.
“The US-China announcement on the temporary lowering of tariffs fired the starting gun for shippers to rush as many imports as they can during the 90-day window of opportunity," Xenata chief analyst Peter Sand said in a May 16 release. “There is no time to waste for these shippers and the rush of cargo will put upward pressure on spot rates on Transpacific trades; however, it is important to understand market dynamics following sudden shocks such as the US-China tariff announcement."
Sand said he expects spot rates to peak and then flatten as carriers redeploy capacity to match demand. But rates could slide again, repeating a pattern seen in the first quarter of 2025.