Key Takeaways
- US imports from China are rapidly declining across all supply chain sectors.
- Trade tariffs imposed by the Trump administration are significantly impacting demand.
- Freight costs for van, flatbed, and refrigerated loads decreased for the first time this year in October.
- Major US ports, including Long Beach and Los Angeles, report substantial drops in Chinese cargo volumes.
- Reduced consumer spending expectations are leading retailers and manufacturers to cut back on orders.
Shipments from China into the United States are experiencing a sharp decline, with recent data from CNBC indicating a substantial reduction across the entire supply chain. This downturn follows a period earlier in the year when imports pushed US ports to unprecedented levels.
The impact of Donald Trump’s tariffs is becoming increasingly evident, cutting deep into demand and reshaping trade flows. This shift is reflected in various economic indicators, particularly within the logistics and shipping sectors.
đź’ˇ Truckload pricing serves as a clear indicator of this downturn, with October marking a significant change. Rates for van, flatbed, and refrigerated loads all saw declines for the first time this year, both on a monthly and annual basis, signaling a broader market contraction.
Freight Costs Experience Significant Drops
Van loads, a key component of freight transport, decreased by 3% compared to September and a notable 11% year-over-year. Similarly, refrigerated loads, essential for perishable goods, fell by 2% month-over-month and 7% annually.
Flatbed loads, used for heavy or oversized cargo, also saw a 4% monthly reduction and a 3% annual decline. These figures highlight a widespread softening in the freight market.
Ken Adamo, Chief of Analytics at DAT, explained that businesses had previously built up inventory in anticipation of tariff deadlines and potential demand fluctuations. He noted that the usual surge associated with holiday shipping looks virtually non-existent this year, indicating a significant change in seasonal trade patterns.
Ports Report Declining China Cargo Volumes
Despite a month-long government shutdown delaying the release of trade statistics, the Census Bureau’s data revealed an $18.4 billion drop in August imports compared to July, coinciding with the implementation of new tariffs. This decline contributed to a more than 23% reduction in the nation’s trade deficit.
đź“Ť The Port of Long Beach, a critical gateway for Asian trade, reported a 16% decrease in imports from China, with CEO Mario Cordero stating that this reduction is evident across the board. The Port of Los Angeles also experienced a fall in its October cargo volumes.
Declines are observed in various product categories, including electronics, furniture, and toys. Furthermore, US grain exports have been affected, as China shifted substantial soybean purchases to Brazil amid the trade dispute. While China has recently committed to increasing US soybean purchases, this has not yet reversed the broader trend of declining trade.
Despite an earlier surge in frontloading by retailers to import goods before tariff deadlines—which saw global containers bound for the West Coast rise by 10% year-over-year—the recent downturn is significantly impacting trade flows.
Containers from China specifically to the West Coast increased by 4.6% due to faster transit times. However, these gains are now being overshadowed by broader declines. East Coast ports, such as Houston, experienced a modest 2% rise in overall container traffic, but China-linked shipments there dropped by 12%.
Anticipated Weak Consumer Spending Impacts Freight Orders
Mario Cordero, CEO of the Port of Long Beach, acknowledged that the port is still in the black but emphasized that the coming months will be crucial in determining the strength of consumer spending during the year’s final quarter.
Ben Tracy, Vice President of Strategic Business Development at Vizion, indicated that the platform anticipates a 16.6% year-over-year decrease in US imports in December, following a 12% decline in the third quarter alone. Tracy stated that there is no bounce back in sight, underscoring concerns about the prolonged nature of this downturn.
âś… Retailers and manufacturers are holding back on placing new orders, primarily due to expectations of reduced consumer spending. This slowdown is attributed to higher prices for food and other essential products, which are tightening household budgets.
Major retailers like Home Depot and Target have reported weaker earnings, while Walmart noted a shift in consumer behavior, with more shoppers focusing on value and a higher proportion of sales coming from affluent buyers.
Long-Term Implications for Freight Demand
Vizion’s data shows that monthly imports have fallen below 2 million TEUs (Twenty-foot Equivalent Units) for the first time since March 2023. Kyle Henderson, CEO of Vizion, attributes this decline to a combination of factors, including tariff uncertainties, a stagnant housing market, and a broader shift away from purchasing physical goods.
Henderson highlighted specific product categories, stating that furniture imports are down by 33%, and toy imports, which typically surge by 40–50% before the holiday season, have only increased by 17%. These figures demonstrate a significant impact on consumer discretionary spending.
đź“Š Container utilization has decreased from 100% to 91%, signaling an excess capacity in the shipping industry. Henderson also noted that spot rates are currently at two-year lows, cautioning that this downturn is substantial enough to reshape freight demand for years to come.
The total volume of containers scheduled to arrive at US ports in December 2025 is projected at 2.19 million TEUs, a decrease from 2.62 million TEUs last year. This reduction of 430,000 TEUs is exerting pressure on various sectors, including railroads, trucking companies, warehouses, and port labor.
A decrease in volume inevitably translates to fewer jobs. Mario Cordero expressed concern for workers, warning that falling demand will lead to fewer daily shifts for longshore crews. The International Longshoremen’s Association, responsible for moving freight at the docks, faces a reduction in its yearly container bonus as volumes continue to decline.
Adding to the strain are tariffs imposed on India. The Global Trade Research Initiative reported a 37.5% drop in Indian exports to the US between May and September, largely due to a 50% tariff applied to Indian goods, further complicating global trade dynamics.
Final Thoughts
The US import landscape is undergoing a significant contraction, driven by tariffs and evolving consumer behavior. This downturn is impacting freight volumes, shipping costs, and port activity, with a ripple effect across various sectors of the economy. The long-term implications of these trends suggest a potential reshaping of global supply chains and a heightened focus on economic resilience.
