The once-busy ports of Los Angeles and Long Beach are seeing a paradoxical quiet, a calm that shipping expert John McCown believes heralds one of the most significant container volume declines in six decades .
The U.S. container shipping industry is heading toward what could be one of the most significant volume declines in its history, according to the latest analysis from shipping expert John McCown . What initially appeared as modest growth in July has quickly revealed itself to be a short-lived tariff avoidance phenomenon, with August data showing inbound container volume growth grinding to a near halt with only a 0.1% year-over-year increase .
The marginal August growth stems entirely from a technicality in tariff implementation. "The new tariffs did not apply to containers that were loaded on vessels at their last foreign port of call before August 7 provided they entered the U.S. before October 5," McCown explains . This exemption created an artificial boost as "the large majority of boxes coming into the U.S. in August being exempt from the tariffs going into effect on August 7" .
The Illusion of Growth: Tariff Front-Running Unmasked
The temporary respite in July, which saw a 3.2% year-over-year increase, now clearly represents what analysts term "tariff" (front-loading effect) rather than genuine market recovery . Businesses strategically rushed shipments to beat the August 7 deadline when revised reciprocal tariffs took effect .
"This was a temporary breather," McCown emphasizes in his analysis. "The growth completely stemmed from companies rushing to ship before the new tariffs took effect in early August" . This artificial stimulus has now evaporated, revealing the underlying weakness in U.S. container import demand.
The mechanism even created peculiar logistical adjustments. McCown suggests some ships may have been "loaded by August 7 and slow-steamed to the U.S." to maximize the window of tariff-free transit .
Diverging Global Trends: America's Shrinking Role
A striking divergence is emerging between U.S. container volumes and global shipping trends. While U.S. imports stagnate, Far East export figures "set a new record and were 6.3% ahead of the same month last year" in July .
"When U.S. container volume data is compared to global data and data in other major areas, there is a noticeable and widening gap," McCown observes, noting that "the downtrends in U.S. lanes are being significantly mitigated by increased volume in other areas" .
This suggests global supply chains are already adapting to diminishing U.S. participation. "World container supply chains have begun to adapt and reconfigure trading patterns. The U.S. is a less relevant player in world trade today than it was prior to these various tariff initiatives and will become more so as announced plans are implemented," McCown states .
Port-Specific Impacts: Los Angeles Bears the Brunt
The Port of Los Angeles, America's busiest gateway for China-U.S. trade, finds itself at the epicenter of this volatility. Executive Director Eugene Seroka confirms that over 40% of their business involves import and export with China-based ports, a relationship spanning more than three decades .
"Announcements this year on trade policy coming out of Washington have caused big increases in cargo at times, and then slowdowns when tariffs were in place that were very high," Seroka reports. "So we've had to be quite nimble and react quickly to information to make sure we could handle the cargo flows" .
The human impact is already being felt. Earlier this year, Seroka revealed that approximately half of the dockworkers at the Los Angeles Port had no work during late May and early June-a situation he described as among the worst he's seen outside of the pandemic period .
The Road Ahead: Steep Declines Projected
The National Retail Federation has revised its 2025 projection downward, now expecting total inbound volume to decrease by 3.4% . Given that year-to-date volume through August shows a 3.1% increase, this projection translates to "the remaining four months of 2025 being down 15.7% compared to the same four months in 2024" .
September appears to mark the beginning of more pronounced declines. In a September 17 presentation, the Port of Los Angeles director stated they expected inbound volume to drop 10% compared to the same month last year . Container bookings data supports this outlook, with bookings from China to the U.S. down 26% in the first week of September compared to the same period last year .
McCown warns that if the currently paused reciprocal tariffs on Chinese imports are implemented in mid-November, "it is highly likely that they would lead to broader declines related to inbound containers to the U.S. from China" .
Additional Cost Pressures: The Ship Fee Wildcard
Complicating matters further is the USTR ship fee plan targeting ships built in China or operated by Chinese carriers, set to take effect in mid-October . Early estimates suggest this could add $125 to over $300 per container at the Port of Los Angeles .
According to a port study, about 30% of the 2,000 vessel calls annually in LA involve China-built or operated ships . Seroka notes that smaller ships will likely bear a higher cost per box due to less volume to spread the additional fee across .
Vincent Iacopella, president of Trade and Government Relations at Alba Wheels Up International, emphasizes that these costs ultimately reach consumers: "No matter who along the way in the supply chain pays it, it ends up in the consumer price" .
Structural Shift, Not Cyclical Downturn
What distinguishes this decline from historical patterns is its structural nature. Unlike temporary disruptions caused by economic crises or pandemics, this downturn appears driven by deliberate policy choices likely to have longer-lasting effects .
"2025's container contraction is completely driven by tariff policies, and there's no indication so far that this trend is short-term," McCown points out. "It's becoming increasingly clear that high tariffs will persist at least through this administration's term" .
The projected decline represents an unprecedented shift for an industry that has historically grown at rates exceeding U.S. GDP. "For a tangible metric that has consistently for decades grown above U.S GDP, most often at two, three or even more multiples of GDP, the unusual nature of an actual decline in inbound container volume into the U.S. cannot be overemphasized," McCown states .
Economic Trade-Offs: Volume vs. Inflation
McCown frames the situation as an economic balancing act: "The more U.S. container imports decline, the greater the hit to business activity and economic growth, but the less inflationary pressure; conversely, if the volume decline is more moderate, then inflation will be more troublesome, but the impact on economic activity will be relatively manageable" .
This creates a no-win scenario where either significant volume contraction or persistent inflation becomes the price of current trade policies.
Conclusion: Navigating Uncharted Waters
As supply chain professionals adapt to what McCown describes as "moving container volume related to trade lanes involving the U.S. into uncharted waters," the ripple effects will extend globally given that U.S.-involved lanes account for more than a quarter of global container miles .
Despite the challenges, port leaders like Seroka maintain long-term perspective on U.S.-China trade relations: "I believe that we'll reach an understanding in the not-too-distant future, and we'll begin to focus on those business and trade relationships that can expand opportunities for both countries" .
For now, the container shipping industry braces for what could be an unprecedented contraction in U.S. imports, with the full inflationary effects of the tariffs yet to fully manifest in economic data . The coming months will reveal whether this decline reaches the historic proportions analysts now fear, and how permanently global supply chains will reconfigure around a diminished U.S. import presence.
