Unprecedented tariffs with China, port slumps, container pileups and blank sailings are the new reality. What other impacts will the tariffs have on shippers and importers who use ocean transportation services? In this article we will examine some of the recent developments regarding the ocean market, and the strategic considerations for shippers and importers to leverage and successfully navigate the new challenges.
Strain from Tariffs
The ocean shipping market is under strain as tariffs slash shipment volumes. The Port of Los Angeles, the busiest in the United States, projects a 35% drop in cargo starting May 2025, which is largely driven by tariffs on Chinese goods that make up 45% of its business. Major retailers are halting shipments, with an estimated 640,000 – 800,000 fewer containers expected. This reduced port activity, coupled with fewer truck pickups and empty container pileups, will inevitably lead to disruptions in the supply chain. Shippers that were reliant on Chinese imports, are being forced to pivot to alternative sourcing regions like Southeast Asia. However, spot rates from ports like Ho Chi Minh to Los Angeles have surged by 24%, adding cost pressures that complicate planning. As a shipper, now is the perfect time to examine alternative routes and also renegotiate and lock in contracted rates, as volatility will create shifts in the supply and demand.
How to Deal with Tariff-Related Tightening
Customs compliance is also paramount as tariff-related rules tighten. The suspension of Hong Kong’s ocean shipments to the US, coupled with the end of the de minimis exemption for sub-$800 shipments signal increased scrutiny. Streamlining documentation and compliance software to ensure the right tariffs are applied would be worthwhile for the importer to have greater visibility and accuracy as it relates to new importation rules. CPC Consultants’ insights and visibility reporting are the tools needed to prevent costly delays or penalties.
Monitoring port performance is essential to avoid congestion traps. With demand shifting and containers being in the wrong places, certain highly congested ports may wind up being empty, while the traffic shifts to other ports. It is important for shippers to track real-time data and by adjusting shipping schedules, it may help to avoid the bottlenecks at smaller ports being overwhelmed by redirected cargo. This proactive approach ensures timely deliveries and avoids extra fees like demurrage.
Lastly, reviewing total shipping costs is vital. Tariffs introduce hidden expenses, from storage -empty container pileups, sudden spikes in spot quote rates and newly invented surcharges left unchallenged. Let CPC Consultants navigate these volatile times with you by providing a comprehensive cost analysis that will identify savings across your ocean freight area and provide proven tactics to combat these challenges in this new reality.