Trade concerns & carrier alliances cause ocean volatility
Policy volatility dampens global demand
Global shippers are reviewing costs, suppliers, and overall supply chain strategies in the wake of U.S. tariffs and policy uncertainty. New and changing tariffs imposed by the U.S. administration have created significant operational disruptions and uncertainty across containerized trade lanes and bulk imports, affecting ocean shipping globally.
U.S. imports from China dropped 64% according to the most recent data from March 24–31, 2025, to April 1–8, 2025, while demand from Southeast Asia and India remains stable due to a 90-day lowering of reciprocal tariffs on goods from those countries.
This sharp decline in U.S. imports from China reflects the immediate impact of the tariffs, as companies scramble to adjust their sourcing and logistics strategies. In contrast, the easing of tariffs on goods from Southeast Asia and India has provided temporary cost relief, stabilizing demand from these regions. This shift underscores the dynamic nature of global trade flows and the importance of agile supply chain strategies in navigating policy uncertainties.
Many companies are opting to book only business-critical amounts to maintain a profile with the steamship lines – hoping that when import conditions become more favorable, they will have priority even if there are deep capacity restraints.
Buyers and suppliers should remain committed to flexibility and resilience. Diversifying sourcing options and establishing robust contingency plans are essential to mitigate risks associated with tariff fluctuations and policy changes. As the global trade landscape continues to evolve, proactive adaptation and strategic foresight will be crucial for maintaining production deadlines and ensuring long-term stability in a volatile market.
Carrier shifts amidst trade policy changes
To offset the tariff impacts, the ocean carriers have discontinued service strings and individual port calls, and certain direct services have become indirect, resulting in extended transit times and higher rates in the second quarter of 2025.
Under the new alliance structure, ocean carriers used for past shipments may no longer meet shipper requirements going forward. Work closely with your provider to carefully review service requirements, transit time needs, and price expectations to ensure alignment with the right carriers.
Q4 port fee for Chinese built vessels
Ocean carriers are developing a response to the U.S. government’s April 17, 2025, announcement concerning a planned fee on Chinese-built vessels. This fee will be calculated using the higher of the ship’s net tonnage or a per-container rate.
If a vessel visits multiple U.S. ports before heading to another country, the fee is charged once per full rotation of U.S. stops. For the first 180 days, there is no fee. Effective October 14, 2025, the fee will be assessed at $50 per net vessel ton for Chinese-owned shipping companies and $18 per net vessel ton for non-Chinese shipping companies operating Chinese-built vessels. The fee will gradually increase over the next three years.
Certain vessels are exempt from the fee, including ships in specific U.S. Maritime Administration programs, empty or ballast vessels, smaller vessels below size or capacity limits, vessels making short trips, ships owned by some U.S. companies, and specialized vessels for exporting certain goods. Companies replacing a Chinese-built vessel with a U.S.-built one of similar size can receive a fee waiver for up to three years.
Asia
Asia–Europe
Demand on Asia–Europe trade remains soft, with congestion at major north European ports delaying ship berthing and impacting weekly trade capacity. Spot market rates have started to weaken again as carriers shift excess capacity from the Trans-Pacific lane into Asia–Europe and other lanes.
Asia–U.S.
U.S.–China tariff regulations announced in early April 2025 have significantly impacted Trans-Pacific container demand, with cargo bookings from China down by 30–60% over the past six weeks. However, volumes for non-China origins from Asia have recovered after reciprocal tariffs were lowered on goods from those countries.
In addition to a series of blank sailings, three Trans-Pacific services will be withdrawn: MSC Mustang, Premier Alliance PN4, and TS Line AWC2. The resumption of Premier Alliance PS5, previously scheduled for May, will be delayed until further notice.
The U.S. Trade Representative has released its final position to address Chinese shipbuilding dominance, with the scope and fees mainly impacting Chinese carriers like COSCO and OOCL. Non-Chinese carriers may circumvent the fees by replacing Chinese-built ships with non-Chinese-built ships. The fee structure, set to be implemented in two phases, will be based on net tonnage per U.S. voyage.
After an initial 180-day grace period during which no fees will be charged, allowing stakeholders time to adjust to the new regulations, fees will start at $50 per net tonnage and increase incrementally by $30 per year over the next three years. The U.S. president has indicated he is considering reducing tariffs on goods made in China, but no official decision has been announced.
A substantial reduction in tariffs could lead to a sudden surge in cargo volume from China. Trans-Pacific trade contract negotiations are ongoing, with some beneficial cargo owners seeking contract extensions until the end of May to better assess the impact of U.S.-imposed tariffs.
Europe
Demand may increase due to U.S. tariff policy, with capacity also increasing. Rate increases have been announced, but conversion is uncertain.
Mediterranean/India
There is softer demand and stable capacity despite blank sailings and schedule unreliability. Expect rates to stay flat or decrease slightly.
North America
U.S.–Asia
Significant tariffs imposed on goods moving between China and U.S. ports effective April 4, 2025, have caused booking activity to drop leading ocean carriers to impose a substantial blank sailing program.
Labor Day in China and Vietnam reduced volumes by 40–50% in early May. Carriers have removed ~30% capacity to the West Coast and ~40% for the East Coast. For North America exports in May and early June, expect a 41% blank sailing program between North Asia and U.S. East Coast (USEC) ports, and an 18% blank sailing program between North Asia and U.S. West Coast (USWC) ports. This may continue if demand remains low.
Port congestion in Asia, especially at transshipment ports, is causing schedule unreliability, with delays of 10–14 days at major ports including Busan, Shanghai, Ningbo, and Singapore. ONE has advised that rail cargo from several U.S. cities must move via USWC ports to balance rail activity, with limited USEC routings starting in Q2 2025.
COSCO is following a similar policy, limiting bookings from rail ramps via USEC ports. The Premier Alliance (ONE/YML/HMM) has indefinitely suspended the launch of their PN4 and PS5 service strings, which was previously planned for May 2025. Due to the drop in demand from tariffs, ZIM has announced the immediate suspension of their ZX2 Central China Express service.
U.S.–Europe
Overall vessel space from U.S. ports is much tighter due to carrier alliance reshuffling and blank sailings during Q1 and early Q2 2025. Adverse weather, vessel bunching from alliance shifts, and labor issues are causing significant port congestion throughout Europe, especially at Rotterdam, Antwerp, Le Havre, Bremerhaven, and Hamburg.
The Ocean Alliance and Premier Alliance joint service have suspended Rotterdam port calls for approximately eight weeks on their AL5 and permanently removed Rotterdam from their ATE2/AT2 service, replacing it with Southampton. These changes are in response to operational backlogs that have been impeding service reliability. For a sense of scope, in early April over 935,000 TEUs of cargo were waiting at north Europe and Mediterranean port anchorages, accounting for 32% of the global total.
Key west Mediterranean ports such as Valencia, Algeciras, and Tanger are also facing congestion due to volume diversion into Middle East and India markets. The Premier Alliance/Ocean Alliance joint service will no longer offer Saint John or Halifax port calls on their AL5 service string, while Hapag has resumed calling Saint John port under the Gemini Cooperation, effective March 2025.
U.S.–LATAM
Rates are stable on the West Coast out of South America, with space challenges from Chile. Rates are increasing from Brazil due to high demand for commodities and congestion at Cartagena and Kingston.
Schedule reliability to East Coast South America (ECSA) ports has been adversely impacted by significant delays at southern Brazil ports of Navegantes and Rio Grande, leading to blank sailings and port omissions. Many carriers are omitting south Brazil ports due to past flooding and ongoing port construction, diverting services to nearby ports like Itapoa and Paranagua, causing congestion to spread.
Space from U.S. Gulf Coast (USGC) to ECSA and West Coast South America (WCSA) ports has also been negatively impacted by the same south Brazil congestion. Ports have increased transshipment cargo volume, causing significant delays at transshipment ports in Panama, Caucedo, Cristobal, Cartagena, and Kingston.
MSC/Hapag and Maersk have extended the suspension of their SEAC String 1/UCLA service at Mobile, Navegantes, and Salvador Brazil ports for another shipping cycle to maintain schedule integrity. Maersk and Hapag will omit Norfolk and have biweekly calls at Rio Grande and Rio de Janeiro ports on their Tango service for another shipping cycle. CMA has stopped calling Norfolk on their Americas XL service due to ongoing delays and will offer new services with their California Bridge service.
Seaboard Marine has suspended service from Savannah port due to congestion but is expanding service between USEC and Colombia. Crowley is launching a new service between Gulfport, Mississippi, and Tuxpan, Mexico, offering rail service between Canada and U.S. hubs and Gulfport.
U.S.–South Asia, Middle East, Africa (SAMA)
Monthly rate increases to the Middle East are announced due to service instability and tight vessel space. Space from USEC and USGC ports to India and Mediterranean trade lanes is significantly impacted by vessels diverting via the Cape of Good Hope, increasing transit times and causing blank sailings.
Services to Red Sea and Persian Gulf ports are suspended with many carriers, and those still offering service, such as CMA and MSC are using transshipments from Mediterranean ports, leading to significant congestion at Western Mediterranean port hubs.
Many transshipment hubs, such as Jebel Ali, Abu Dhabi, Mundra, and Colombo, are severely congested. There is a shortage of space on the USEC/USGC to India due to carriers blanking sailings from low import demand while export volumes are strong. Limited services from USWC to the SAMA region are mostly indirect and impacted by Asia port congestion.
Direct services like ONE/HMM/YML PS3 to India are full and require booking notifications a full month in advance. CMA, MSC and COSCO offer service to the Middle East from USWC ports. Additionally, Turkon has begun offering service between USEC ports and Mundra ports and Nhava Sheva ports via transshipment through Turkish ports, as of last month.
U.S.–Oceania
Space has opened up and rates have decreased now that peak season has concluded. Congestion at USEC ports has largely cleared, and direct carrier services have resumed stability as of April 2025, with no port omissions in recent schedules. Delays on transshipment services via Asia into Oceania are expected due to current congestion at Asia transshipment ports.
Brown Marmorated Stinkbug Season (BMSB) season is officially over effective May 1, 2025, and will resume on September 1, 2025. Union members at Patrick and Hutchinson terminals in Australia will be renegotiating their contract later in 2025, with anticipated strike action during negotiations.
South America
LATAM
Seaboard has commenced operations for dry and refrigerated cargo in San Antonio, offering new shipment alternatives to ports such as Brooklyn, Philadelphia, Houston, and Miami. However, due to significant congestion at transshipment ports, a booking suspension on the SWX service from the central region has been implemented, reducing allocations by 50%.
CMA CGM has updated its ACSA1 service, now providing direct service from China to San Antonio as the first port of call on the West Coast of South America, offering competitive transit times to Chile.
In Colombia, Hyundai (HMM) has launched the Transatlantic 1 (TA1) service, connecting Northern Europe and the USWC with a port rotation including Southampton, Le Havre, Rotterdam, Hamburg, Antwerp, Miami, Cartagena, and others. Seaboard is expanding its North Atlantic service starting June 25, 2025, offering direct connections from Santa Marta, Colombia, to Philadelphia, PA, and Brooklyn, NY, emphasizing fast transits for time-sensitive and perishable commodities.
In Peru, service instability persists as carriers like Hapag-Lloyd, Hyundai, MSC, and ONE face space constraints on the Callao to Buenaventura route, resulting in limited capacity availability.
Amid high demand for Brazilian exports, carriers are announcing a stop to bookings for specific vessels and modifying the voyages to keep the freight moving and the services running as smoothly as possible. Plan to book 4 to 6 weeks in advance.