US Logistics Update [Apr 19, 2025]-English

U.S. Economy

Federal Reserve (Fed) Chairman Powell warned on Saturday that the Trump administration's higher-than-expected tariffs are expected to raise prices and slow growth, making it difficult to achieve the Fed's twin goals of maintaining maximum employment and price stability. This makes a Fed rate cut unlikely for the time being. Stock market slump continues. In response to Powell's tariffs comments, President Trump showed blatant distrust, saying “the Fed needs to lower rates right now” and that “Powell will resign if I want him to”. Meanwhile, for the second time in two weeks, many people took to the streets across the country, including in front of the White House, to protest against President Trump. (see photo of protest in front of the White House below)

President Trump's policy “missteps” in the first two and a half months of his presidency have put

his political image as a “get things done” man at risk, the Washington Post reported today.

However, a majority of Americans see them as early missteps as the Trump administration works

to make big changes. This assessment is likely due to the fact that Trump's policy changes have

not yet been reflected in concrete statistics, and it is expected that the president's assessment will

change dramatically once the policy changes are reflected in concrete numbers.

A CNBC survey of 380 leading supply chain organizations, including the Chamber of Commerce, National Association of Manufacturers, National Retail Federation, and Apparel and Footwear Association, found that 61% of respondents believe it would be more cost-effective to move their supply chain to another country with lower tariffs rather than bring it back to the U.S., CNBC reported Thursday. Cost was cited by 74% of respondents as a reason for not re-shoring, and 21% cited “difficulty finding skilled labor. Of those interested in rebuilding their supply chains in the U.S., 41% expect it to take 3-5 years to rebuild their supply chains, and 33% expect it to take more than 5 years, indicating that they will not be able to reorganize their supply chains in the near term. As for President Trump's current tariff policies, 89% of companies say they are experiencing order cancellations, and ironically, 61% of respondents say they feel the Trump administration is bullying domestic companies. Meanwhile, the U.S. goods and services deficit (which has plagued successive U.S. administrations), which had surged in January, narrowed somewhat in February.

(see table and graph below)

Maritime Cargo Market Trends

Trans-Pacific Eastbound (TPEB) Market Trends
Shippers are accelerating blank sailing due to a significant decrease in shipments from China. In May, supply reduction of 30~40% is expected through blank sailing and vessel downsizing. After the reduction of the universal tariff to 10%, demand in Asian markets excluding China has recovered, but not enough to offset the decline in volumes from China. Many experts believe that a compromise will eventually be reached between the U.S. and China as there are limited alternative markets to China, but they are highly concerned about the logistics disruption afterward, which could be comparable to a pandemic if the volume that has been blocked for 1-2 months is released all at once.

U.S. Trade Representative (USTR) Decides to Impose Fees on Chinese-Made Ships Starting October 14th
The USTR announced that starting October 14, Chinese-manufactured ships operated by Chinese carriers will be subject to a fee of $50 per net supply ton when they arrive at U.S. ports. The fee will rise to $80 a year later and will increase annually, reaching $140 in 2028. Meanwhile, the fee will only be charged at the first port of call and only five times per year per vessel. Carriers based outside China and operating Chinese-built vessels will be charged a fee based on the higher of net supply tonnage or container volume, starting at $18 per ton, rising to $23 by April 2026 and reaching $33 in 2028. The fee per container starts at $120, rising to $153 next year and $250 in 2028. USTR's fees will have the biggest impact on COSCO Shipping and its subsidiary OOCL. Sea-web's calculations show that the Cosco Hope, with a net deadweight tonnage of 63,544 tons, is expected to incur fees of $3.2 million per U.S. port call, while similarly sized ships operated by non-Chinese carriers are expected to incur fees of around $1 million per port call.

Air Cargo Market Trends

Hong Kong Post announces suspension of parcel service to the U.S.
Hong Kong Post announced that it will suspend its ocean parcel post service to the United States and suspend its air parcel post service from April 27, in retaliation for the U.S. government's repeal of the “de minimis” exemption and increased tariffs on goods from Hong Kong to the U.S., effective May 2.

Temu and Shein announced price increases effective April 25.
Temu and Shein have announced that they will raise prices for U.S. customers starting April 25, encouraging shoppers to make purchases before the increase takes effect. The fact that both companies—Temu, based in China, and Shein, headquartered in Singapore—made similar announcements at the same time has sparked curiosity and speculation in the market. Although a surge in U.S. orders was expected ahead of the repeal of the De Minimis exemption at the end of April, along with explosive demand for air freight due to preemptive shipping, e-commerce shipments from China have shown unexpected weakness. This slowdown, coupled with Hongkong Post’s suspension of parcel services to the U.S., has fueled various rumors and speculation in the logistics market.