Recently, the U.S. President explicitly extended the “reciprocal tariffs” grace period to August 1, stating that this date “will not change again.” Behind this announcement, the unpredictability of U.S. tariff policies continues to pose severe challenges for the global shipping industry and supply chains.
Following the tariff plan announced in April, which triggered a rush of imports by businesses, the extension of the grace period did not spur another wave of import surges. Data from the Port of Los Angeles shows that TEU volumes in May fell by 5% year-on-year, with a projected 27% decline in July, reflecting shifting market expectations. Karen Ling, Chief Commercial Officer for Asia at Marsh, pointed out that rising costs driven by protectionism are prompting companies to restructure their supply chains, with localization and nearshoring trends becoming increasingly evident—potentially suppressing international shipping demand in the long term.
High inventory levels are another defining feature of current supply chains. The import surge in the first quarter left U.S. retailers with ample stock, and although some has been depleted, the U.S. Logistics Managers’ Index (LMI) rose to a nearly two-year high in June, primarily due to elevated inventory levels. Experts suggest that, given existing stockpiles and tariff pressures, future import volumes may fall short of expectations. This has directly led to weak shipping demand and a sharp drop in freight rates. Drewry data shows container freight rates fell 5.7% month-on-month, down more than 20% from their peak, reflecting persistently sluggish U.S. import demand.
Shipping giant Maersk also acknowledged that declining policy transparency and shifting deadlines are affecting corporate shipping decisions, with an average tariff burden of around 21%. Karen Ling predicts that short-term policy uncertainty will cause shipping volumes to fluctuate, while mid-term stabilization may occur at lower levels.
The challenges facing the global shipping industry extend far beyond tariffs. Geopolitical conflicts are driving up insurance costs. War risk insurance premiums have risen to varying degrees, with rates for Israeli ports soaring to 0.7%, further increasing operational expenses.
Faced with this complex situation, Karen Ling advises companies to adopt multi-dimensional strategies, including renegotiating with freight forwarders, testing crisis response plans, optimizing high-risk zone shipments, diversifying supply chains, adjusting pricing efficiency, and expanding insurance coverage. However, she also warns that strategies like “nearshoring” may encounter challenges such as regulatory disparities, labor skill shortages, and complex rules of origin, potentially causing operational disruptions in the short term.
Although regions like Southeast Asia may seek negotiations with the U.S. for better terms, overall, the trend of tariff policies driving up costs is unavoidable, impacting global manufacturing and consumers alike. The path to supply chain restructuring, amid the dual forces of policy and geopolitics, remains fraught with unknowns and challenges.
