The U.S. and China ongoing spat is rattling shipping companies, with rising import costs expected to reshape global supply chains and shrink freight volumes.
London-based maritime consultancy Drewry said in a webinar on Thursday that it now forecasts a 1% decline in global port volumes this year due to U.S. trade policies.
"Assuming that two-thirds of current tariffs remain in place, U.S. imports from China could fall by 40%," Drewry said.
The impact is already showing up in stocks like Honolulu-based Matson (MATX), the largest U.S.-flag container carrier.
Matson shares have plunged 39.5% from a 52-week high of $169.12 to $102.38 as of Friday. Since Trump's "Liberation Day" tariff announcement on April 2, the stock has dropped 24.4% year-to-date.
Diana Shipping (DSX), which specializes in shipping dry bulk commodities, has tumbled 23.5% this year.
Other non-U.S.-based shipping giants are feeling the strain too:
- Denmark’s Maersk (AMKBY) is down 12% since Liberation Day.
- Germany’s Hapag-Lloyd has slipped 2%.
- Hong Kong-listed OOIL, parent of China’s OOCL, has dropped 9%.
Meanwhile, Israel’s ZIM Integrated Shipping Services (ZIM) warned earlier this month of a rough year ahead despite its revenue jumping 63% in 2024.
Shipping industry gets flashbacks to Covid-era disruptions
If the shipping industry feels like it’s seen this before, it has. Today’s uncertainty is starting to resemble the early Covid era when global trade nearly ground to a halt, industry insider say.
"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.
Kleintop, citing traffic data at the Los Angeles and Long Beach ports, said:
"But for bookings in the weeks and months ahead, we are seeing falling demand and high cancellation rates rivaling those of the pandemic."
Shipping volumes are already falling fast. According to a report from Project44, U.S. imports from China dropped more than 10% the week of April 7 compared to a year ago and plunged another 30% the following week.
Before the tariffs kicked in, import volumes had been trending higher year over year, suggesting companies were racing to stock up ahead of Trump's policies.
As imports go back down now, economic growth is expected to follow suit.
On Tuesday, the International Monetary Fund (IMF) cut its forecast for global GDP growth to 2.8%, down from 3.6% in January.
The IMF also slashed its outlook for U.S. growth to just 1.8% from 2.7%, citing "epistemic uncertainty and policy unpredictability" from the White House.
The latest U.S. GDP data is due out April 30.
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