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California Container Volume Drops Amid Trade Tensions

A shipping port showcases a mix of empty and full containers amid trade tensions.

News Summary

Eastbound international container volume from Southern California has dropped to its lowest level in six months, with a significant 5% decline from the previous week. The decrease, attributed to ongoing U.S.-China trade tensions and steep tariffs, has led to forecasts of continued decline in cargo volumes. Major retailers are struggling with limited inventory supplies, and experts warn of rising prices and shortages for consumers. This situation could severely impact the trade and logistics sectors, which are critical to the local economy.

California – Eastbound international container volume from Southern California dropped to its lowest level in six months during the week ending May 18, indicating a significant impact from ongoing trade tensions between the U.S. and China. This decrease represents a 5% decline compared to the previous week and a 10% drop when measured against the four-week rolling average.

The decline in container volumes is closely tied to steep tariffs imposed on imports from China amidst the ongoing U.S.-China trade war, with certain tariffs reaching as high as 145% on specific goods. Current statistics from RailState indicate that eastbound international container volume from the region is approximately 26.3% lower than its peak recorded during the week of March 3-9, 2025, when importers hurried to ship goods before the original increase in tariffs came into effect.

The recent drop comes despite a temporary truce announced between the U.S. and China, which has led to a reduction of tariffs on the majority of Chinese goods to 30%. Experts predict that there may be a surge in imports as companies look to stockpile their inventories during this period of reduced tariffs.

RailState tracks container sizes ranging from 20, 40, and 45-foot containers on major rail lines operated by BNSF Railway and Union Pacific. The initial announcement of the tariffs in January 2025 sparked a rush among suppliers to ship products, causing a temporary increase in TEU volume. However, following the peak observed in early March, there has been a notable decrease of 15,000 TEUs, signaling the end of the “beat the tariff” phase.

Since then, TEU volumes have declined to approximately two-thirds of their original peak. The Port of Los Angeles is expecting a dramatic 35% decrease in cargo arrivals, with a halt on shipments from China and a corresponding drop in volumes from Southeast Asia.

Forecasts suggest that cargo volume will fall 28.6% to 85,486 TEUs, with subsequent weeks likely seeing a decrease close to 33% resulting in 74,925 TEUs being processed when the ships arrive. This troubling trend is expected to further affect the trade and logistics sectors, areas which significantly contribute nearly $300 billion to the local economy.

Recent data from March shows that the port experienced a 15% year-over-year decline in TEUs, marking the fourth consecutive month of declines. Major retailers are reportedly grappling with only a six-to-eight-week inventory supply, raising concerns about potential shortages of goods.

While there is some optimism regarding potential tariff reductions on certain items, smaller businesses are particularly feeling the squeeze from the current trade dynamics. Industry experts warn that without necessary policy changes, consumers and manufacturers may face challenging decisions in the near future as supply chain disruptions persist.

The trade industry in Southern California supports almost 2 million jobs, and experts anticipate that continued tariff implications will lead to rising prices and decreased availability of products for U.S. consumers.

In summary, the persistent decline in eastbound container volumes out of Southern California serves as a stark reminder of the broader consequences arising from the U.S.-China trade war, affecting various sectors, job markets, and the economy at large.