Slowing Trade & Declining Freight Volumes Signal Concerns for Peak Season
Recent data indicates a slowdown in North American trade, impacting freight volumes and raising concerns for the typically busy peak season. While container imports reached a record high in July, spurred by a pause in tariffs, the momentum quickly faded.
Honour Lane reported a “swift decline and slow recovery” following the July peak, noting a gradual increase in manufacturing even before the Chinese Golden Week. Many customers have reported building inventory in the U.S. and temporarily halting shipments. Ocean carriers have responded by announcing 35 blank sailings for October, including the suspension of an Asia too U.S.service route by the ONE alliance (CMA CGM,COSCO,Evergreen,and OOCL) between Chinese ports and Long Beach and Oakland,California,starting in early September. This reduction in ship capacity is contributing to rising ocean freight rates, with a $1,000 general rate increase (GRI) per forty-foot container implemented on September 15th.
According to Sea-Intelligence,North America is the only region to experience negative freight container volume growth during the trade war period.Noah Hoffman, Vice President of North American Surface Transportation for C.H. Robinson, explained that the ocean peak season, typically running from July through October, “peaked in July” this year. The National Retail Federation’s (NRF) Global Port tracker, produced with Hackett Associates, forecasts a “steady decline” in import cargo volume at major U.S. container ports for the remainder of the year after near-record numbers during the summer.
The NRF attributes the downturn to escalating tariffs, stating that “reciprocal tariffs across the globe” and “more and more sectoral tariffs impacting a wider scope of products” are creating uncertainty. Retailers have increased inventory ahead of tariff hikes, but the unpredictable trade policy hinders long-term planning.
Ben Hackett, founder of Hackett Associates, described the trade outlook for the final months of the year as “not optimistic.”
The Logistics Managers’ Index (LMI) August inventory data suggests the decrease in freight volumes is impacting related industries like rail, trucking, and warehousing. Zachary Rogers, an associate professor of supply chain management at Colorado State University and LMI member, noted that increased freight capacity in August indicates a lack of available freight to move, perhaps due to pulled-forward inventories and an overall reduction in goods flow.