Drewry: Global container volume forecast to fall 1% due to trump tariff war

Drewry forecasts global container volume to fall 1% by 2025 due to the impact of Trump's tariff war, which has led to widespread uncertainty in the global supply chain and logistics market.

Global container volume forecast to fall

Global container volume forecast to fall (Photo: Phaata)

President Donald Trump's tariff war is forecast to cause global container volume to fall 1% by 2025, according to Drewry's analysis - only the third time in its history that the firm has forecast such a decline.

Specifically, this reduction is equivalent to about 1.8 million TEU, based on the total global container traffic of 183.2 million TEU in 2024, and accounts for about 10% of the increase of more than 10 million TEU in global traffic from 2023.

Drewry said that container volume had fallen 8.4% during the financial crisis in 2009 and 0.9% during the COVID-19 pandemic in 2020. The research firm began tracking container data in 1979.

In a presentation, Drewry noted that the decline in demand from shippers will increase supply in the market, thereby putting downward pressure on ocean freight rates and leading to “much more” scrapping of tonnage and idling of ships as carriers rebalance supply and demand.

While there is currently a 90-day extension on most tariffs, President Trump said this week that tariffs on Chinese goods could be reduced. However, Drewry warned that if two-thirds of the current tariffs remain in place, imports from China into the US could fall by as much as 40%.

The analyst firm also warned that increased frontloading by importers during the extension could cause container shipping chaos in July, due to port congestion, blank sailings and a shortage of empty containers – a phenomenon that has been seen during the COVID-19 pandemic.

The tariff war between the US and China has now become a goods embargo between the two trading partners, with impacts spreading across the supply chain.

According to data from Vizion, global container shipping bookings fell 1.57% week-on-week and 9.94% year-on-year in the week ending April 14. Import bookings into the US fell 12.15% week-on-week and 22.37% year-on-year, while bookings from China to the US fell 22.15% week-on-week and 44% year-on-year.

According to reports, Hapag-Lloyd said it saw a 30% drop in trans-Pacific bookings, while Evergreen Marine said capacity on the route was down 30-40% due to a 60-70% drop in imports and exports from China.

Because of the highly interconnected supply chain, as trade between China and the US has slowed, shippers have been quick to shift supplies to other regions, and shipping lines have been cancelling sailings, rerouting and shifting capacity to more profitable routes, such as Asia-Europe.

Some experts say that even if Beijing and Washington reach a tariff truce by the end of May and Chinese factories resume operations, it will take at least 30 days for economic activity to recover at the Port of Los Angeles – the largest US import gateway; 45 days for the Midwest and Houston; and 50 days for the Port of New York-New Jersey. The reality is that shipping recovery often takes longer than disruptions – ports in Canada and the US have taken weeks to months to recover from labor strikes in 2024.

It’s unclear whether logistics providers like warehousing and trucking will be ready to resume operations. At least one major East Coast port is reportedly scrambling to find any type of export cargo to keep its stevedores and trucking fleets running.

“Anytime you are handling cargoes outside of the normal commodities, that increases risk,” warns Andrew Kinsey, director of maritime consulting at Integrated Specialty Coverages. He notes that a lack of supporting infrastructure, like electrical outlets for refrigerated cargo or the capacity of terminals to handle oversized or overweight cargo, could be a barrier.

Kinsey said that it is not just container shipping that is being impacted, but also investment in project cargo, due to uncertainties around tax policy and market conditions, as well as high interest rates. “We are waiting on several final investment decisions for infrastructure projects that have been delayed,” he said.

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