By Lisa Baertlein
LONG BEACH, California (Reuters) – The global ocean shipping industry that handles 80% of world trade is navigating a sea of unknowns as U.S. President Donald Trump stokes trade and geopolitical tensions with historical foes as well as neighbors and allies.
That is the backdrop for this week’s S&P Global TPM container shipping and supply chain conference in Long Beach, California, an annual event that marks the start of container shipping contract negotiating season.
Attendees this year include industry heavyweights like container carriers MSC, Maersk and Hapag-Lloyd, marquee customers including Walmart, and major logistics firms including DSV and DHL.
These companies will be grappling with the ripple effects of increased protectionism, which could reduce international trade while weakening the negotiating position of massive container ship owners that have drawn robust profits and for years held the upper hand in pricing.
Trump has already slapped an additional 10% tariff on goods from China, the world’s largest exporter, and has proposed million-dollar port entry fees for Chinese-built ships.
As early as Tuesday, the U.S. could impose 25% tariffs on familiar goods like avocados and tequila from Mexico, and beef, lumber and oil from Canada.
Trump has threatened to levy an additional 10% tariff on Chinese goods. His administration also plans new or higher tariffs on steel and aluminum and has floated 25% duties on products from the European Union.
“Unprecedented uncertainty is all around,” said Peter Sand, chief analyst at transportation pricing platform Xeneta.
The world’s biggest importer’s shift away from free trade hits as global supply chains are managing higher costs from global warming-fueled severe weather and routing ships away from the Suez Canal to avoid attacks by Iran-backed Houthi militants in support of Palestinians in Gaza.
U.S. container imports of everything from plastic toys to machine parts have surged, in part due to early purchases to avoid tariffs. But trade experts warn that a pullback is likely once new import taxes kick in, targeted nations retaliate, and inflation-weary shoppers absorb the brunt of tariff-related cost increases – something that could pressure shipping demand and prices.
The Drewry World Container Index’s spot rate for a 40-foot container was $2,629 as of Thursday, 75% below the pandemic peak of $10,377 in September 2021 and lowest since May 2024.
“The geopolitical landscape has of course become more complex which could lead to wild swings for freight rates in either direction, but our base case is for a moderation throughout 2025,” Jefferies analysts said in a recent note.
In another move that has set off alarms around the globe, the U.S. Trade Representative on Feb. 21 proposed hefty fees on Chinese-built vessels entering U.S. ports under a union-supported plan to spur U.S. shipbuilding.
Under the proposal, a vessel owned by Chinese maritime transport operators including state-owned COSCO would pay a port entrance fee of up to $1 million per vessel. The fee for other operators using Chinese-built ships could top out at $1.5 million.
The change could benefit Taiwanese and South Korean liner operators. Still, experts warn it will have a major impact on container carriers and could translate into steeper consumer prices for goods from toys and clothing to food and fuel.
“The economic burden on U.S. exporters and importers will be huge,” container shipping expert Lars Jensen said on LinkedIn.
“The actions taken by the U.S. administration over the past four weeks are unprecedented in scope and scale.”
(Reporting by Lisa Baertlein in Long Beach, California; Editing by Marguerita Choy)
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