West Coast port slowdown: Shipments plunge as U.S. tariffs take their toll

Port officials on the West Coast are bracing for a dramatic drop in cargo shipments as new U.S. tariffs on imported goods take effect.

From Seattle to Los Angeles, trade data reports indicate sharp declines in cargo coming from Asia in May as companies cut imports in the wake of President Donald Trump’s tariffs.

At the Port of Los Angeles, incoming cargo volume will drop by about 35% this month compared to last May, according to a CNBC report. Gene Seroka, the port’s executive director, called it a precipitous drop as major American retailers halt shipments from China.

In Oakland, Calif., port officials told the local ABC affiliate about an increase in “blank sailings,” which happens when shipping companies cancel a scheduled route or a port call along the route.

The port slowdown is alarming on multiple fronts, raising the specter of snarled supply chains, empty store shelves, layoffs across industries, and increased risk of economic recession.

Port slowdown predictions and fears

The Trump tariffs and ensuring trade war have roiled global markets, but the port slowdown is a stark illustration of their impact. Trump announced sweeping new tariffs in early April, but delayed most of them for three months—except for the 145% tax on imports from China.

Imports from China make up a huge portion of goods coming into West Coast ports, about 45% in Los Angeles. China is the Port of Oakland’s top import trading partner and third export partner.

In Seattle, officials said shipments were up about 18% in March, but that the impact of the tariffs would hit in May, when they expect shipments to drop 40% over last year at the same time.

According to a Wired report, research showed that blank sailings to the West Coast jumped 13% at the end of April and will jump to 28% at the beginning of May.

Officials in Oakland warned that retaliatory measures by countries targeted by US tariffs would hit agricultural and manufactured products, including almonds, beef, pork, and recycled materials. That would directly impact the port’s top export destinations—Japan, Taiwan, China, and South Korea—and could ultimately erode California’s market share for perishable and high-value commodities.

“A tariff-induced downturn in the Port’s cargo volume—whether from import slowdowns or retaliatory export losses—ultimately could jeopardize job stability and our region’s economic health,” Port of Oakland Executive Director Kristi McKenney said in a news release.

Port of Seattle Commission President Toshiko Grace Hasegawa warned of higher costs for importers and exporters, supply chain disruption, and job losses due to the tariffs.

Container exports from the U.S. to China have collapsed this year, falling nearly 80% year over year, according to analysis by Vizion.

All eyes on supply chain risk as tariffs, global instability force enterprises to take action

COVID had everyone talking about supply chains. Five years later, volatile business conditions with sweeping tariff changes are putting supply chain risk back in the spotlight.

Supply chain shock and the fallout for consumers

The port slowdown on the West Coast could portend widespread job losses, empty shelves, and an economic recession, according to industry experts.

One firm predicted that consumers would start seeing empty shelves later this month, with layoffs in the trucking and retail industries in June followed by a recession this summer. Dockworkers, warehouse employees, and delivery workers are other jobs that could be at risk.

Seroka told CNBC that retailers in the U.S. stocked up ahead of the tariffs, so they may not feel the impact of the slowed shipments for several weeks. He expects consumers will see less variety of available goods due to higher costs rather than empty shelves.

Other experts say consumers could see certain goods, like toys, clothing, shoes, and furniture, becoming harder to find and more expensive.  The holiday season could get tough for retailers and shoppers alike.

While supply chains are stronger than they were before the COVID pandemic, there’s the risk of a “whipsaw” effect, Zach Strickland, FreightWaves market expert, wrote in a May 4 report.

“If a trade deal is struck, a sudden surge in orders could overwhelm transportation infrastructure. The longer the current trade uncertainty persists, the greater the chance— and impact—of such a rebound spike,” he added.

Moving forward amid uncertainty

Tariff negotiations between the US and China could change the port situation quickly. but while Trump has been optimistic about a deal, China is still just considering entering into talks.

Meanwhile, as the trade war continues, businesses have to manage ongoing uncertainty. This is where core systems, data analytics, and cloud technologies play a big role. They help companies model changing tariffs scenarios and their impacts.

Without a doubt, the next few weeks and months will be difficult. Stability isn’t on the horizon. But modern technology tools give businesses the agility to manage risks and adapt to constant change.