US Logistics Update [May 3, 2025]-English

US Economy

Import volumes from Asia have plummeted in the wake of President Trump's tariffs but will rebound at some point, at which point the U.S. port system could be paralyzed, container carrier representatives warned at the Georgia International Trade Conference this week. While the timing and magnitude of the rebound remains unknown, with most industry experts expecting imports from China to eventually rebound, Fabio Santucci, MSC's U.S. president, warned that “if terminal utilization remains at 70-90% for weeks on end, the system could collapse,” adding that “if the port backlog exceeds 10 days, it becomes difficult to resolve the backlog.” Charles van der Steene, president of Maersk North America, said, “Regardless of whether demand doubles or returns to the levels of about eight weeks ago, the port system is not fundamentally better than it was five years ago,” noting that “when volumes spike, system disruptions become inevitable.” Meanwhile, shipping lines such as Maersk, MSC, Hapag-Lloyd, and others pointed out that the logistics infrastructure outside of terminals (warehousing, chassis, drayage, railcar shortages, etc.) is just as big a problem as it was during the pandemic.

Meanwhile, large retailers such as Walmart, Target, and others have recently resumed shipments

from China after meeting with President Trump to convey concerns that “stores will be empty and

supply chain disruptions will be visible within two weeks.” It is unclear whether this is a sign of an

imminent U.S.-China tariff deal (or a deal that will be reached in about 40 days when the ships from

China arrive) or a move to prevent stores from being empty in the face of higher tariffs.

The U.S. Department of Commerce reported today that U.S. gross domestic product (GDP) growth in the first quarter of this year decreased 0.3% (preliminary, annualized rate) from the fourth quarter of 2024. This is a sharp decline from the 2.4% growth rate in the fourth quarter of last year, and the first contraction since 2022 during the Covid-19 pandemic. The main driver of the contraction was imports, with the value of goods imports surging 50.9% quarter-on-quarter. This was attributed to importers temporarily building up inventories to avoid tariffs before they were imposed. It will be interesting to see whether President Trump will take this as a 'shock' and use it as an opportunity to change his policy or dismiss it as a distorted indicator reflecting inventory buildup ahead of the tariffs.

Ocean Freight Market

Carriers continue to cut supply on Pacific routes
Partially reflecting the impact of the Chinese Labor Day holiday, 29% of Pacific sailings were canceled during the week of May 5, reducing supply to around 70% of normal. Demand has been around 49% lower than the previous four-week average since April 2, but carriers implemented a General Rate Increase (GRI) on May 1. On the Atlantic route, the 90-day reciprocal tariff moratorium has led to a surge in demand for transportation during this period, causing most European ports to be overcrowded. Many carriers are raising prices and some are imposing a Peak Season Surcharge (PSS).

Air Freight Market

CMA CGM Expands Air Cargo Business by Acquiring Air Belgium
French carrier CMA CGM, which entered the freighter business in 2021, has acquired the cargo business of Air Belgium, adding four freighters to its fleet, including two A330-243Fs and two B747-8Fs. This will bring CMA CGM's freighter fleet to 14 aircraft, including the upcoming addition of a B777F to its existing fleet of nine (4 B777F, 3 A330F, 2 B747F), with eight A350F freighters scheduled to enter service starting in 2027. CMA CGM is looking to expand its Atlantic and Asian routes with hubs in Paris, Liege, and Chicago, and in the U.S., the airline leases and operates two B777Fs from Atlas Air, with a third on lease soon. CMA CGM's next move will be closely watched as the tariff war has significantly reduced demand from China.