President Donald Trump's trade war policies are bringing about changes in global shipping not seen since the coronavirus pandemic, with ocean carriers readying for significantly reduced demand, according to analysts and observers.
Specifically in focus: U.S. trade with China, amid the back and forth over tariffs and possible deals. The uncertainty has led to a decrease in shipping volumes from China to North America, with cancellations currently at 50%, according to global logistics firm Flexport.
Flexport reports that the short-term outlook for shipment-volume growth from Southeast Asia to North America "remains muted." Volumes in April remained consistent from the beginning of the year through March, prior to the Trump tariff announcements.
However, this could change soon.
"Ports are unloading above-average container arrivals in the past couple of weeks that were stocking up ahead of the tariffs," Schwab Chief Global Investment Strategist Jeffrey Kleintop told IBD, referring to traffic data at the Los Angeles and Long Beach ports, the major U.S. entries for shipments from Asia.
"But for booking in the weeks and months ahead, we are seeing falling demand and high cancellation rates rivaling those of the pandemic," Kleintop added.
Trump Trade War: Shippers Ready For Tariffs
Ocean carriers are already withdrawing capacity from the Pacific Ocean route between Asia and North America. The withdrawals are occurring "at faster rates" than during the coronavirus pandemic in anticipation of reduced demand following new U.S. tariffs on goods from China, according to Flexport.
Shipping operators are doing this by sending smaller vessels, canceling or skipping a scheduled port of call in the middle of sailing and suspending entire shipping routes, the global logistics firm reports.
When these disruptions could hit U.S. consumers is a different matter. Cargo ships sailing from Hong Kong to Los Angeles take on average around two-to-three weeks, between 25 and 30 days to Houston and about 40 days to reach New York City, according to sector analysis.
The National Retail Federation, whose members include Walmart, Target and others, forecast earlier this month that U.S. import cargo volume will fall at least 20% year over year in the second half of 2025 as U.S. companies pause orders from China.
On Thursday, maritime consultancy firm Drewry announced it expects global container port volume to decline 1% due to Trump's trade war policies. London-based Drewry reported this was only the third time since it began collecting container shipping data in 1979 that shipping demand has dropped. Container volume fell 8.4% during the global financial crisis in 2009 and just below 1% in 2020 at the start of the coronavirus pandemic.
Reuters reported Thursday that Drewry believes that even if two thirds of Trump's current tariffs remain in place, U.S. imports from China could fall by 40%.
"It stands to reason that more discretionary and high-ticket items could suffer more from a consumer pullback than food commodities," Kleintop said.
Shipping Stocks And Retailers
Big retailers that rely on China-made goods like Amazon, Walmart and Target are also set to feel an impact from Trump's trade war and the shipping changes.
Amazon reports first-quarter earnings on May 1 with Walmart's Q1 financials coming on May 15. Target follows with first-quarter earnings and revenue on May 21. Amazon stock is down around 0.7% in April while Target stock has dropped 7.5%. Walmart shares have advanced more than 8%.
Container liners and logistics companies ZIM Integrated Shipping and XPO Logistics are down 1.8% and 10.4%, respectively, during April's stock market action.
The 37 stocks in the IBD-tracked Transportation-Ship industry group have collectively declined 17.3% in 2025. That puts the sector at a weak No. 178 out of 197 ranked industries, with 1 being the best performer and 197 the worst.
Domestic freight company Old Dominion Freight Line is down 11.3% in April while peer ArcBest has declined 17% during stock market trade in April.
Old Dominion Freight Line executives on their Wednesday Q1 earnings call said that their revenue per day for April will decrease about 6% compared to a year ago. The executive team added that a "full recovery in our business trends might take additional time."
Meanwhile, J.B. Hunt is down 12.3% this month while Schneider has dropped about 4%.
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