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Several shipping companies have reduced services on the Asia-US route

Several shipping companies have reduced services on the Asia-US route


A maritime consulting firm said that major container shipping companies have suspended at least six scheduled weekly routes between China and the United States due to the collapse of trade caused by President Trump's punitive tariffs on the world's largest exporter.

According to the capacity data provided in the customer consultation, the ships on these routes can transport a total of 25,682 40-foot containers per week, filled with toys, tennis shoes, auto parts and items used by American manufacturers to produce goods, and can transport more than 1.3 million 40-foot containers annually.

As large container ship operators take action to mitigate the impact of Trump's unstable trade policies, these services have been cut, along with the cancellation of individual voyations.

Policy makers, economists and business owners are increasingly eager to obtain information on Marine trade, as it accounts for 80% of world trade and is an indicator of the health of the global economy.

Simon Sundboell, the CEO of Danish maritime data provider eeSea, said of the ongoing reduction in container ship capacity: "This is not a precursor but evidence of the decline in economic activity."

Sundboell said that the suspended routes include the regular weekly services operated by MSC, Zim and Ocean Alliance (including COSCO, Evergreen, CMA-CGM and Orient Overseas Container Line (OOCL)).

He said that four of the service cuts affected West coast ports, one affected East coast, and one affected the Gulf Coast.

The container shipping companies that selected these services either declined to comment or did not respond immediately.

Maersk and Hapag-Lloyd's Twin Star Alliance did not suspend services, although both partners experienced a significant reduction in bookings from China to the United States related to tariffs in April and replaced some vessels with smaller ones.

After more than two months of trade deadlock, representatives from the United States and China will hold a meeting in Switzerland this weekend.

Global shipping companies protect their profits by suspending and canceling the services of individual voyages (referred to as blank voyages) to ensure that the number of vessels at sea does not exceed the demand of customers. This reduces unnecessary management costs, maintains the balance between supply and demand, and supports the competition of spot exchange rates outside the contract.

After the COVID-19 pandemic disrupted global trade in 2020, the number of blank voyages increased significantly, which is also part of the reason why global container ship operators achieved record profits.

Last month, major US retailers such as Amazon and Walmart, which account for nearly half of global container trade, suspended or cancelled factory orders in response to the 145% tariffs imposed by Trump on China. Previously, these import tariffs more than doubled the cost of goods made in China.

Drewry, a shipping consultancy, said in a podcast earlier this week that the number of individual voyager cancellations or cancellations on important trans-Pacific routes from Asia to North America soared from 9% in the week ending March 30 to 24% in the week ending May 4.

Data from Drewry shows that the capacity of the Asia-North America West Coast route decreased by 20% in April and by 12% so far in May.

The consulting firm said that the production cut had a slightly greater impact on the east coast of North America, with a 22% reduction in April and an 18% reduction so far in May.

Daniela Ghimp, the project manager of Dreury Marine's benchmark freight rates, said that MSC, the world's largest container ship operator, cancelled 30% of its scheduled trans-Pacific voyations in April, more than any other container ship company.

Ghimp said that the Premier Alliance, composed of Ocean Network Express (ONE), Hyundai Merchant Marine (HMM) and Yang Ming Marine Transport, led the way with 20% blank voyages in May.

ONE declined to comment. HMM and Yang Ming did not respond immediately.

John McCown, a senior fellow at the Center for Maritime Strategy, said the full impact of Trump's tariffs could be postponed until July, when U.S. container imports could decline by 25% or more compared to the same period last year.

Alan Murphy, the CEO of supply chain consulting firm Sea-Intelligence, said: "There is always something to do. I believe either more production capacity is phased out or spot prices start to collapse."

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