Stopped shipments to the United States, a large number of shipping companies canceled voyages
"Stop shipping", "order withdrawal", "flight cancellation" - under the Sino-US tariff war, trans-Pacific trade is experiencing an unprecedented turbulence.
The high tariffs of the United States became the last straw to break the industry. The "epicenter" of tariff increases swept through the entire Asian manufacturing base. As a beneficiary of the "China +1" strategy, Vietnam has become an important source of container imports to the United States in recent years. Linerlytica analysis shows that China and Vietnam together will account for 51% of total US container imports in 2024. Now, high tariffs have directly punctured the bubble in this supply chain, forcing several Asian manufacturers to cancel their bookings.
According to Loadstar, Taiwanese paper manufacturers that set up factories in Vietnam alone withdrew about 300 containers of cargo, and May and subsequent orders were completely stagnant. One manufacturer admitted: "The customer clearly asked not to ship in May, and the new tariff made the price system completely collapse. One customer even asked us to cut prices by 46 per cent to offset the higher costs associated with the tariffs, but that simply wasn't possible."
The withdrawal, shutdown and layoffs of the manufacturing industry are rapidly transmitted to the shipping chain through the path of "reduction - ballast - jump". A ship is not worth sailing if it has no cargo; If a route loses money for a long time, it is not worth maintaining; If a region continues to lose orders, then the corresponding port, warehousing, trailer, customs clearance and other all service chains will shrink.
For shipping companies, the toughest question is not shrinking profits, but "whether to sail at all." In early April, shippers rushed to "forward shipment" before the tariffs officially landed, pushing up the Asia-U.S. West route freight rate to $2,453 /FEU and the U.S. East route to $3,637 /FEU. But this is just a "desperate rally".
Freightos analyst Judah Levine warned that behind the rush is a looming deep collapse in demand.
Judah Levine pointed out that this "forward shipment" is likely to lead to a significant drop in demand for the United States in the coming period. Many shippers will wait to see where the negotiations and policies go, leading to a short-term slump in demand.
"The traditional peak season for trans-Pacific shipping is likely to be extremely quiet this year." Levine believes that once existing inventories are consumed, whether the market can recover will depend on the impact of the trade war on economic fundamentals, and the decline in consumer demand will be directly transmitted to the decline in demand for shipping capacity.
Faced with the threat of empty space, shipping companies acted quickly. ONE announced that the new PN4 US-West route, originally planned to open in May, has been postponed indefinitely, and its Premier Alliance alliance has also suspended the deployment of related services. At the same time, Mediterranean Shipping (MSC) has cancelled several trips on its Orient weekly route and Pearl US-West route, and even regional carriers such as TS Lines have announced the cancellation of AWC2 services scheduled to depart on April 29.
According to eeSea data, 49 flights are expected to be cancelled on the Far East - North America route in April, and 36 blank flights have been recorded in May, and the total number of port jumps is expected to exceed 40. "If the plunge in bookings is true, it would be a very significant disruption to trade flows," warned Lars Jensen, a shipping analyst.
One industry insider said that the call to "stop shipping to the United States" may be just a sideshow in the tariff storm, but it is a true reflection of the current predicament of the shipping industry. The collapse in container bookings, the mass suspension of shipping companies and the disillusionment with rising freight rates all point to a harsh reality: the vulnerability of global trade is being amplified infinitely.
The high tariffs of the United States became the last straw to break the industry. The "epicenter" of tariff increases swept through the entire Asian manufacturing base. As a beneficiary of the "China +1" strategy, Vietnam has become an important source of container imports to the United States in recent years. Linerlytica analysis shows that China and Vietnam together will account for 51% of total US container imports in 2024. Now, high tariffs have directly punctured the bubble in this supply chain, forcing several Asian manufacturers to cancel their bookings.
According to Loadstar, Taiwanese paper manufacturers that set up factories in Vietnam alone withdrew about 300 containers of cargo, and May and subsequent orders were completely stagnant. One manufacturer admitted: "The customer clearly asked not to ship in May, and the new tariff made the price system completely collapse. One customer even asked us to cut prices by 46 per cent to offset the higher costs associated with the tariffs, but that simply wasn't possible."
The withdrawal, shutdown and layoffs of the manufacturing industry are rapidly transmitted to the shipping chain through the path of "reduction - ballast - jump". A ship is not worth sailing if it has no cargo; If a route loses money for a long time, it is not worth maintaining; If a region continues to lose orders, then the corresponding port, warehousing, trailer, customs clearance and other all service chains will shrink.
For shipping companies, the toughest question is not shrinking profits, but "whether to sail at all." In early April, shippers rushed to "forward shipment" before the tariffs officially landed, pushing up the Asia-U.S. West route freight rate to $2,453 /FEU and the U.S. East route to $3,637 /FEU. But this is just a "desperate rally".
Freightos analyst Judah Levine warned that behind the rush is a looming deep collapse in demand.
Judah Levine pointed out that this "forward shipment" is likely to lead to a significant drop in demand for the United States in the coming period. Many shippers will wait to see where the negotiations and policies go, leading to a short-term slump in demand.
"The traditional peak season for trans-Pacific shipping is likely to be extremely quiet this year." Levine believes that once existing inventories are consumed, whether the market can recover will depend on the impact of the trade war on economic fundamentals, and the decline in consumer demand will be directly transmitted to the decline in demand for shipping capacity.
Faced with the threat of empty space, shipping companies acted quickly. ONE announced that the new PN4 US-West route, originally planned to open in May, has been postponed indefinitely, and its Premier Alliance alliance has also suspended the deployment of related services. At the same time, Mediterranean Shipping (MSC) has cancelled several trips on its Orient weekly route and Pearl US-West route, and even regional carriers such as TS Lines have announced the cancellation of AWC2 services scheduled to depart on April 29.
According to eeSea data, 49 flights are expected to be cancelled on the Far East - North America route in April, and 36 blank flights have been recorded in May, and the total number of port jumps is expected to exceed 40. "If the plunge in bookings is true, it would be a very significant disruption to trade flows," warned Lars Jensen, a shipping analyst.
One industry insider said that the call to "stop shipping to the United States" may be just a sideshow in the tariff storm, but it is a true reflection of the current predicament of the shipping industry. The collapse in container bookings, the mass suspension of shipping companies and the disillusionment with rising freight rates all point to a harsh reality: the vulnerability of global trade is being amplified infinitely.
