The impact of the US tariff war continues to have a direct impact on container shipping operations, as the number of cancelled sailings on the Transpacific trade continues to increase each week. When we look at the data, it is quite evident that the impact of the trade war has caused many shippers to pause, or outright cancel, shipments. This, in turn, reduces demand for capacity on container vessels, to which carriers respond by cancelling sailings.
The biggest impact is expected to be seen at US West Coast ports, who handled the majority of ocean cargo coming from Asia, and volume of cargo moved via these ports is massive. The busiest container port in the U.S. is the Port of Los Angeles, followed closely by the Port of Long Beach. Both ports handle in excess of nine million TEUs per year in container volume. In terms of the Port of Los Angeles, cargo from China accounts for 45% of its portfolio, which is the most significant of any US port.
As President Trump’s aggressive tariffs rattle business owners and shake the foundation of American importing, the men and women who work on the ground at the country’s busiest port are feeling the effects too. Thousands of dockworkers, heavy equipment operators and truck drivers support a flurry of activity at the Port of Los Angeles, which covers 7,500 acres on San Pedro Bay and processed more than 10 million 20-foot-long cargo units in 2024. The neighboring Port of Long Beach moved 9.6 million 20-foot equivalent units, or TEUs, last year.
A 2023 report found that the ports of Los Angeles and Long Beach contributed $21.8 billion in direct revenue to local service providers, generating $2.7 billion in state and local taxes and creating 165,462 jobs, directly and indirectly. A decline of just 1% in cargo to the ports would wipe away 2,769 jobs and endanger as many as 4,000 others, the study found. As a result of the implemented tariffs, it is expected there will be more than 30 “blank sailings” in May at the ports of Long Beach and Los Angeles, which occur when cargo ships cancel planned trips. That will mean 400,000 fewer containers will be shipped through the ports, officials said.
The initial tariff impacts will be felt by the importing and transportation industries and, while their downstream effects are harder to notice, they may actually be bigger. More than half of US imports are not consumer goods, but intermediate goods that US businesses use to make their products in America. Retail shoppers will notice higher prices and fewer goods, and that will get most of the headlines. Businesses, especially smaller ones, will be paying more for components, machinery, and raw materials used in everything from cars to musical instruments to lighting fixtures. From there, the broader economic damage will grow. Because the economy is intertwined, the adverse job impacts will quickly become a broad-based economic downturn.
For more information, contact David Lychek, Director – Ocean & Air Services.
