This week:
- US shippers waiting for the “dust to settle” on Trump tariffs before resuming business plans
- As US importers cancel or suspend orders, blank sailings on trans-Pacific lines increase
- Changes to US LTL classification system coming, causing some to prepare and others to wait
- Canada Post facing strike by postal workers union unless both sides ink new contract by May 22
US Shippers Pausing Plans, Waiting for the “Dust to Settle” on Tariffs
The impact of US President Donald Trump’s tariff policy is being felt across the supply chain, according to a report by Journal of Commerce (JoC) Senior Editor William B. Cassidy. In response, US shippers are putting their business plans on pause before moving forward, one industry executive said.
Shippers “are waiting for the dust to settle to determine how tariffs might influence and change their short- and long-term business strategies,” Spencer Frazier, executive VP of sales at J.B. Hunt Transport Services, was quoted as saying in the JoC article.
Strong growth in US imports and some exports over the last year has reversed, Cassidy said. This shift is mainly attributed to disruptions caused by the Trump administration’s tariffs. In addition, a little over a week ago, the US Trade Representative (USTR) announced substantial new port entry fees for vessels made in China or otherwise linked to the country when calling at US ports. Cassidy said uncertainty over the tariffs and port entry fees is noticeable globally, from ports in Asia and Europe to freight hubs in the US.
On the domestic front, Cassidy noted double-digit percentage declines in trucking and intermodal rates. However, he said this has more to do with the ongoing freight recession than trade policy uncertainty. While shippers will maintain pricing power in trucking and intermodal in 2025, they are also expected to reduce their shipping and sales volumes. Despite a recent increase in truckload spot rates, overall pricing remains near the low point reached in 2023.
Meanwhile, ocean freight rates have fallen sharply in the last four months. As of the week ending April 18, the average spot price from Asia to the US West Coast was $2,050 per FEU, a 61% decrease since the beginning of the year and a 74.8% drop from the peak in July 2024. Similarly, Asia-US East Coast spot rates have fallen by 53.7% since January 1 and by 69.4% from last summer to $3,100 per FEU.
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Trans-Pac Blank Sailing Forecast Increases as US Importers Cancel Orders
As more and more US importers cancel orders in response to high tariff rates, trans-Pacific container lines are increasingly blanking, according to industry analysts and port projections.
Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, is one such industry observer noting the escalation in blank sailings. In his Sunday Spotlight newsletter, Murphy called the situation “staggering” as “carriers now clearly anticipate container demand in week 18 to be 28% lower than expected.”
Murphy went on to say, “And on Asia-North America East Coast (lines) in week 19, (carriers) now expect shippers to move as much as 42% less cargo than anticipated.”
The rise in blank sailings coincides with the Port of Los Angeles’ projections of a 14% month-over-month drop in container volumes for week 18 and a 38.6% decrease for week 19. In the first full week of May, the port — the largest import gateway in the US — anticipates a 43% year-over-year plunge in volumes.
Industry Prepares for Changes to US LTL Classification System Due in July
Changes to the US’s less-than-truckload (LTL) classification system are arriving on July 19. While some shippers are already preparing for the changes, others are taking a wait-and-see approach, according to participants in a recent JoC webinar.
The National Motor Freight Traffic Association (NMFTA) is responsible for the National Motor Freight Classification (NMFC) system used by the US LTL industry. The NMFTA has been working on NMFC reclassification for several years as part of its Classification Reimagined project.
The reclassification will move more than 2,000 MNFC items into full-scale density classes, which could directly impact the cost of shipping LTL freight. Although the NMFC doesn’t dictate prices, it provides the foundation for how LTL carriers determine rates. The potential for rate changes was a common concern for participants in the JoC webinar.
Shawn Galloway, VP of pricing at the multi-regional LTL carrier Pitt Ohio, noted that shippers are uncertain as they prepare for classification changes.
“We’ve tried to do some analysis, but so few of our shipments had good NMFC information or dimensional information on bills of lading that it was very cumbersome,” Galloway said during the webcast. “I’ve tried to help shippers out individually as they’ve come to me. But overall, I would have no idea.”
While some shippers are trying to get ahead of the NMFC changes, Galloway believes others are waiting until July to see how things go. “I think that’s a bit dangerous,” he said. Galloway also pointed out that shippers resisting reclassification should anticipate increased shipment inspections, reweighing, and adjustments to their freight invoices.
Strike Threat Looms at Canada Post, Customers Advised to Seek Alternatives
Canada Post, the government-owned postal service, is facing a potential work stoppage by the Canadian Union of Postal Workers unless both sides can agree to a new long-term contract by May 22. In a move acknowledging the likelihood of labor disruption, Canada Post released a statement earlier this month advising its customers to consider alternative delivery options.
“This is not the message we hoped to be sharing at this time,” Canada Post said in the statement released April 3. “But we recognize how important it is to give you the information you need to make business decisions.” The statement encourages shippers to talk to other delivery services to minimize the impact of a potential strike.
Contract negotiations have stalled, with both sides acknowledging a breakdown in talks in March. A significant point of contention is the handling of weekend deliveries. Canada Post wants to create a new part-time workforce for weekend work. The proposed new hires would be part of a broader initiative to align staffing with fluctuating volumes. The union opposes these measures and says the postal service should use its current full-time employees whenever possible.
Last year, the union went on strike during the peak holiday season, halting operations for over a month until the Canada Industrial Relations Board intervened on December 17.
