Ships, trucks and railroads measure the economic blow from tariffs.
Eyes on Shipping Data
The Wall Street Journal reports Wall Street Is Watching This Shipping Data to Gauge Tariff Impact
U.S. retailers and manufacturers have been stocking up on furniture, clothing, electronics and everything else that comes into the country by containership. That has caused a wave of containers to wash over the neighboring ports of Los Angeles and Long Beach, the main gateway for imports from China.
The pull-forward indicates that some U.S. businesses have enough inventory to last weeks or longer before having to refresh orders. Southern California port officials expect imports to fall steeply in May.
Expected Container Ships
Already, companies have paused bookings for containers that ferry everything from scrunchies to batteries across the oceans. Ryan Petersen, chief executive of Flexport, a San Francisco-based freight forwarder, said China-to-U.S. bookings have declined 60% since April 9. Petersen said that for the first time since his company was launched more than a decade ago, Vietnam is a bigger origin point.
And ocean carriers have been canceling sailings across the Pacific Ocean to the U.S. Almost 30% of such journeys were canceled for the week ended May 4, according to Flexport. At the Port of Los Angeles, imports are expected to fall 35% this week compared with a year ago.
“That’s going to have a huge impact on the logistics industry,” Petersen said. “Consumers probably won’t see this until later.”
Truck Orders
That looks like one of the worst seasonal adjustments in history. There are seasonal peaks mid-year, every year.
To make any sense of it, I added the down-sloping line.
Truckers are bracing for a tough year by pulling back on orders for big rigs. Net orders for heavy-duty trucks in North America tumbled to 16,500 vehicles in March, down 5.9% from the same month in 2024, with the highest order-cancellation rate in almost two years, according to ACT Research.
Trucking companies had been hoping 2025 would provide a long-awaited turnaround after several years of depressed rates for the sector. Tariffs have injected a new level of uncertainty into forecasts.
ACT Research President Ken Vieth said dealer inventory levels in March hit a record 91,600 vehicles as truckers were “flirting with global financial-crisis profitability levels.”
Supply-chain activity
The GEP Global Supply Chain Volatility Index, based on S&P Global’s monthly survey of 27,000 businesses in 40 countries, measures factors such as demand for goods, inventory levels and transportation costs. The March reading was taken as U.S. retailers and manufacturers pulled forward orders to stock up ahead of tariffs, but before Trump’s sweeping tariff announcements in April.
John Piatek, a vice president of consulting at GEP, said the biggest driver of March’s decrease was a pullback in manufacturing activity in North America while companies braced for higher purchasing costs and a possible slowdown in consumer spending. Piatek expects April’s reading will show companies cutting back further as they prepare for “worse economic conditions.”
What’s Going On With Shipping
May 4 Update
Volume from China is still coming in, but much of is because ships don’t turn around.
Select Comments
“Short-haul and long-haul trucking will be the most affected. The truckers are really taking the brunt of this.”
“You can’t swallow 145 percent tariffs. That is going to be shared.
“When US manufacturing is dependent on components coming from China, that is going to be built into US manufacturing costs.”
“Every 4 containers less coming into the US is one less driver needed.”
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The ISM® Prices Index registered 69.8 percent in April, increasing 0.4 percentage point compared to the March reading of 69.4 percent, indicating raw materials prices increased for the seventh straight month after a decrease in September. The Prices Index has increased 15 percentage points over the past six months to record its highest reading since June 2022 (78.5 percent).
May 2, 2025: Consumers Face End of De Minimis Tariff Exemptions on $800 Packages
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May 5, 2025: ISM Services PMI Increases Slightly, Prices Surge, Employment Contracting
ISM services remains above expansion level of 50 with concerns over tariffs rising.
Prices paid by services organizations for materials and services increased in April for the 95th consecutive month.
Small Businesses Will Get Hit the Hardest by Trump’s Tariffs
May 5, 2025: Small Businesses Will Get Hit the Hardest by Trump’s Tariffs
Small businesses were already struggling. Tariffs will end the viability of many.
The nitwit repugs in SC wanted to boycott all things French after 911. Remember freedumb fries. Then their bosses reminded the nitwits Michelin was the largest private employer and would move out if they continued the MAGA idiocracy. There for sure is a correlation between those that believed in Raygunomics, WMD, invading iraq, thinking 9.11 was a surprise attack, the Wall Street bailouts in panic of 2008, and MAGA and tariffs are good. A common thread among nit wits. I’ll add on the same sort of nit wits that don’t know the CIA started the ukraine war in 2014 under obama and mccain.
i watched this today. smartest guy on shipping, i have heard. https://www.c-span.org/program/washington-journal/cary-davis-on-the-impact-of-president-trumps-tariffs-on-the-nations-ports/659577
Wow. Great post Mish.
Sal is great. I am a subscriber to his youtube channel.
I am happy to read the comments from sruda as well. Someone who worked in the area. Very enlightening. Thanks sruda.
Yes. The container ships that are arriving from China are now subject to 145% tariffs. The impacts are just beginning.
Simple tariffs will raise prices. Higher prices will force higher wages. Products generated in other counties will still be cheaper than those generated here.
If this is a Wall Street problem then simply bail out those crooks again.
Thank you for the very informative videos by Sal.
It’s such a shame – none of this upheaval was necessary.
The first chart basically says this is all a Giant Nothingburger. Shipment volumes are back to pre-front running levels, no big deal.
I bet if Mish extended the graph back earlier in time it would show that currently levels are not historically all that low.
What would be really surprising is if, despite all the tariffs, the US trade deficit barely drops!
Then why did Trump say we’ll have 2 dolls instead of 30 for Christmas?
Trump just said he is NOT open to rolling back China tariffs.
Do you really need another doll?
Since you are certified MAGA dumb, I’ll explain it to you. “Dolls” are euphemism for all the goods that will be missing as soon as the current inventory is depleted. All 100% self-induced by socialist central planner Trump and his MAGA cult.
It will hurt many but not me, I can hop on a plane to the other side of the world to buy whatever I want whenever I want. Right now, I’m positioning for extra profits from all of this.
Good times ahead (for me). Enjoy the empty shelves you’ve sown in about six months.
The newest data for shipments heading to LA show recovery to 2024 levels. The “empty shelves” claim is nonsense.
Matryoshka Doll.
our trannie girls football team needs many plastic sex dolls.
@MPO45v2, you’re normally on my ‘ignore’ list because you tend to be confused, and this comment is a good example. But I’ll answer this one.
I don’t care one bit why Trump said something. By now most of us understand that Trump’s words should be taken as rhetorical not literal. Broad-brush, not specific.
And my comment had absolutely nothing to do with rolling back tariffs. I speculated – but said it would be surprising – that the U.S. trade deficit might hardly change EVEN WITH the tariffs.
Reversing 30+ year of globalization and outsourcing by said Wall Street in a few months?
I thought superman was a fiction.
I would be sympathetic if Trump signed EO stating Wall Street should pay for it.
He’ll get that right after peace in Ukraine and those 200 tariff deals.
Having spent my adult career in ports, container shipping and supply chain management, I find it interesting that we just seem to now be discovering the massive enterprise that supports containerized imports and exports. We tend to focus mostly on the lost factory jobs associated with off-shoring and ignore the huge employment gains, many with good wages and benefits in businesses and industries that support: waterfront labor, railroads, railroad cars to carry intermodal containers, customs house workers, freight forwarders, third party logistics providers, air freight forwarders, warehousing, trucking-both short and long haul, inland barge network, tugs, linesman, warehouse management systems, convey belts technology, shelving, and on it goes. Apparently these jobs are just a fiction. And I should add that these jobs exist in high numbers in both red and blue and purple states. Well guess again. It’s massive and the drop in trading volume that is happening in both U.S. exports and imports is and will have a shockingly high and negative impact on the U.S. economy. Exactly why is a lost job in Cleveland making coffee makers or a lost job making sheets and towels in South Carolina more important than a job lost in trucking, port labor, railroading? There has been no answer to that question that I am aware of.
Trump was elected so he could wreck the US economy, what he promised to do assured Americans and others of the outcome, excepting those wearing red hats to stave off the evils of liberal communism
You are describing just the import arm of the financialization of the US economy. Importing what you decided not to make anymore in exchange for future claims on US assets is not productive strategy long-term. What you see is US jobs being exported from the hinterland. Those containers enter full of manufactured products but if we take the top three US container ports as an example 75% of them leave the country empty. Who wins?
“Who wins?”
Maybe the US citizen/consumer who decides with their own salary, their own wherewithal, their own personal choices and their own rationales what they want to purchase, and from whom. They can purchase locally if they want.
Are you and Trump saying the average American is too stupid to know what’s best for their own personal interests? And that you should make them understand. That would be an interesting bumper sticker for Trump’s third run for President LOL
Spoken like a true Libertarian believer. There are a few still around. What use is a cheaper price for imports if your good-paying job was eliminated? The coasts and Wall Steet won but everyone else lost. Thank God enough people saw the light to stop this madness.
Here is the future you are advocating, it always ends the same way with central planners. Trump is channeling Maduro.
https://archive.is/VfrHe
You are using the Reductio ad absurdum argument. I won’t fall into that trap. Come up with something better.
Just wait six months, bookmark this Doug, put it on your calendar. But what would you care anyway, you’re in France getting all those China goods nice and tariff free.
That is the “wait and you will see I was right” argument.
Just using standard boomer protocol on a proud boomer.
One day you might grow up Junior.
doug wants chairman mao/donald to plan the economy. it’s cute. never change. i love the entertainment. i bet the binky you are sucking on is made in china.
Well, you have the numbers wrong. Yes, many containers do go back empty but it’s not 75%. Averaged across the US, the ratio is about 2.5
imports to 1 export. Some ports are actually more balanced in and out while some are very one sided. Also, the jobs that I list support the export side of things as well. We tend to export much heavier commodities and also lower valued ones such as waste paper, scrap metal, lumber, hay. But there is also large volumes of higher valued agricultural products moving in temperature controlled containers: fruits, veggies, frozen and chilled fish and meats. We should be as concerned about the drop in exports as we are imports. Lastly, not everything we import is finished goods. We import vast quantities of input materials to support US manufacturing: parts, components, etc. I comment on facts because I have spent my life’s work (and now consulting) living this up close. The talk from the White House and the facts as they exist don’t match. Not even close. There is, however, ample room and need for some rebalancing of trade. But that’s not what Trump is doing. Far from it.
The 75% is the average of the three largest ports. Look it up.
you have no clue. i lived on waterfront. i watched empty containers in port of oakland being chopped up and put in hulls of old oil tankers to transport scrap metal back to china so they could rebuild more containers with higher quality than scrap back to usa. also saw many fruites veggies meats……..loaded up to ship out west on pacific……….
dockworkers and truckers and import/export servicing and accountants…………FFS you cannot be this thick. usa has extremely high wages in 2025 and high quality of life. MAGA wants people to work in factories banging out hubcaps with hammers? moronic. like trump.
I am shopping for a new Pyrex coffee percolator, no plastic. What street is that on in Cleveland? The store in The Christmas Story?
a very good point. it’s right to bemoan the loss of manufacturing jobs, but why not also talk about the jobs imports create. true, a lot of the same economic activity would exist if the demand was met domestically, but the shipping/logistics related activity wouldn’t be there.
the issue is people talk about job losses and job gains on a national level and even if it evens out, it still leaves people out of work, right? if 100,000 factory workers lose jobs and this leads to 120,000 other people in tech getting jobs . . . . those 100,000 people are still veru upset and rightly so. politically those people still have power and society needs to contend with them.
“You can’t swallow 145 percent tariffs. That is going to be shared.”
Yes, it will come in the form of 2 dolls instead of 30 but the two will be priced like 30.
“It’s tariff turtles all the way down and inflation all the way up!”
I have yet had anyone explain to me how extorting companies to pull their production back to the US, one of the most or the most expensing place in the world to manufacture, is not going to be inflationary. Please help me understand.
This image explains it.
https://preview.redd.it/maga-after-trump-claims-gas-is-only-1-98-per-gallon-v0-wyr9tl3kh8ze1.jpeg?width=640&crop=smart&auto=webp&s=2dec218c0d173b3bcc47b54c42c3e4e0defcd983
We already have an inflation problem because we were printing trillions of new dollars to send overseas buying imports. The tarriffs are supposedly to lower this outflow of money constantly sent overseas by spurring the establishment of manufacturing here, so more money stays in the US. But even if we can substantially reduce the trade deficit, inflation will only stop if the Republicans and Democrats dont start up value debasing dollar printing again. Then bubble prices of assets can deflate, which can lower expenses like rent, insurance, then wages can go down or at least quit spiking. Its the foolish money printing by the Republicans and Democrats that is the root of inflation.
Wall Street is yet again gazing at its navel to assess whatever is topical.