The carriers most exposed by Trump’s trade war with China

The chart below created by Linerlytica highlights the containerlines most exposed on the transpacific by the ongoing trade war initiated by Donald Trump, the American president, against China, that has effectively brought most business between the two largest economies in the world to a halt.

Hede, Matson, SeaLead, TS Lines, and COSCO are most at risk from the immediate fallout, according to research by Linerlytica, who suggest between 30% and 40% of transpacific container imports are still effectively halted by the tariffs.

“The US-China standoff continues to keep container market sentiment poor with US tariff concessions far from sufficient to restore Transpacific volumes with cargo bookings in the next 3 weeks reported to be down by 30-60% in China and by 10-20% in the rest of Asia,” Linerlytica noted in its most recent weekly report.

Upcoming Labour Day holidays are likely to further dampen cargo demand in May, possibly forcing carriers to cancel additional sailings over the coming weeks in order to stop further freight rate erosion, Linerlytica suggested.

Clarksons Research data suggests that 6% of global container trade in teu is accounted for by US imports from China – the world’s two superpowers – which will now be charged at elevated tariff levels of at least 145%. A further 8% is at the 10% baseline level. 

“For the smaller niche carriers, the trade war is particularly destructive,” analysts at Sea-Intelligence warned on Sunday. “Most of them rely on large volumes from China on their services and are not well equipped to suddenly switch to alternate non-Chinese origin cargo. For some of these, we can potentially expect full-service closures for the duration of the trade war.”

Global carriers are tipped to concentrate port calls at fewer American ports in the coming months while switching some China calls to other Asian manufacturing centres. 

The trade war is beginning to show up in port numbers with China’s transport ministry reporting today that for the week April 7 to 13, container throughput at China’s ports dropped 6.1%.