TAIPEI (Global Views Monthly/TVBS News) — Amid escalating tensions between the United States and China, the global shipping industry confronts unprecedented challenges and transformation. With Washington imposing retaliatory tariffs as high as 145% on Chinese goods, exports have been devastated, bilateral shipping volumes have contracted sharply, and the stability of supply chains and logistics ecosystems has been upended.
Despite unstable demand and freight rate pressures, Taiwanese shipping companies maintain an optimistic outlook, believing that as long as cargo exists, transport demand will follow. They also anticipate the shipping market will evolve toward "regionalization" and "shorter supply chains," requiring carriers to implement more flexible operational strategies to weather the tariff storm.
Remember the retaliatory tariffs that President Donald Trump imposed on various countries? How much was levied on China? The answer is a staggering 145% — a rate that has not only devastated Chinese exporters but also precipitated a sharp decline in U.S.-China container shipping volumes, consequently increasing employment risks throughout the logistics industry and in port cities.
According to data compiled through mid-April by the container tracking service provider Vizion, orders for 20-foot containers (TEUs) shipped from China to the United States have plummeted by 45 percent. The shipping giant Hapag-Lloyd (赫伯羅德) has also reported that Chinese customers have canceled approximately 30 percent of their orders. Furthermore, the International Chamber of Commerce (ICC, 國際商會) has warned that the costs of entering the American market have reached their highest levels since the 1930s. The shipping industry now finds itself mired in a quagmire.
Of greater concern to the industry is what happens after the 90-day tariff buffer period expires: supply chain disruptions and price volatility could lead to shortages of children's products, sporting equipment and household goods. Importers face cost pressures they cannot pass along, which will continue to impact a shipping market that had only recently begun to recover. The options available to shipping companies now are limited: they can either reduce sailings to support prices or switch to smaller vessels to lower costs. Hapag-Lloyd has adopted the latter strategy, maintaining the number of voyages while reducing vessel size. This approach helps avoid low loading rates, preserves the economic efficiency and market visibility of their operations, and enhances operational flexibility to respond quickly to changing market demands.
'The Cargo Is Still There, Just Waiting to Be Shipped'
International shipping companies have already implemented countermeasures, but how do Taiwan's "Big Three" container carriers view the current market conditions? At an investor conference on April 25, Evergreen General Manager Wu Kuang-hui (吳光輝) emphasized, "There's no reason to be pessimistic if the cargo still exists." Indeed, Evergreen's April capacity decreased by 30 to 40 percent, and China's imports and exports contracted by 60 to 70 percent, but he believes it's merely a matter of delayed shipping schedules.
Wu said that major retail channels originally maintained a positive outlook on U.S. import volumes this year, with long-term contract prices expected to increase over last year. Evergreen's medium and large customers had indeed significantly increased both volume and price in their contracts, but tariff disruptions have now slowed the pace of new agreements. He noted that some Chinese and American businesses continue to monitor tariff developments, while others have already suspended shipments, but the overall outlook remains "cautiously optimistic."
Three days later, at a general meeting of the Taipei Ship Owners' Association, executives from Yang Ming and Wan Hai also weighed in on the tariff situation. Yang Ming General Manager Pai Kun-jung (白崑榮) candidly acknowledged the difficulty in assessing the impact of U.S. tariffs at present, but suggested that changes in cargo volume need not be viewed pessimistically. From a production and supply chain perspective, he noted, unless systemic risks emerge that cause U.S. economic conditions to deteriorate and consumer purchasing power to decline significantly, goods will still need to be shipped.
In his analysis of market conditions, Pai noted that the United States imports 22 to 23 million TEUs from Asia annually, and this cargo volume cannot all become "Made in America" in the short term. Looking ahead, he emphasized the importance of monitoring supply chain transfers, suggesting that Mexico might become a key focus in future supply chain configurations.
Wan Hai is similarly monitoring tariff trends closely. General Manager Tommy Hsieh (謝福隆) believes that tariffs will inevitably affect shipment volumes from China to the United States. Although North American route cargo volumes have temporarily decreased, he noted that during the later stages of both the Red Sea crisis (紅海危機) and the COVID-19 pandemic (新冠肺炎疫情), businesses competed fiercely for shipping space — a situation he expects to repeat itself when shipments resume in the future.
Shipping Industry Shifts Toward Regional, Shorter Routes
The shipping market as a whole is also changing, trending more toward "regionalization" and "shorter supply chains." Hapag-Lloyd has noted that while the international logistics market previously relied heavily on U.S.-China trade, it is now gradually shifting toward emerging markets and intra-regional trade networks. For example, freight demand from Southeast Asian countries such as Thailand, Cambodia (柬埔寨) and Vietnam has "increased significantly."
According to the "DHL Trade Atlas 2025" report, between 2024 and 2029, the fastest-growing regions for global trade will be concentrated in South Asia, Southeast Asia and the Middle East, especially countries like India, Vietnam, Indonesia and the Philippines. The emergence of these shipping hotspots signifies a move toward regionalization and shorter supply chains, with production sites positioned closer to markets. Regional, small-batch, high-frequency shipping demands are poised to become the new mainstream.
Emerging manufacturing bases like Thailand and Vietnam are replacing parts of China's supply chain role, implying that the "China+1" strategy is becoming increasingly prominent. For shipping companies, as long as cargo exists, the market will continue to rise. The subsequent test for carriers will be how to flexibly allocate vessel types and routes. The regionalized and shorter supply chain freight market will also become a key element in reshaping supply chains globally. ◼
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This article is excerpted from the May issue of Global Views Monthly. Click here for the Chinese-language version of the story: 貨量都還在！關稅引爆中國出貨崩，長榮、陽明、萬海卻不怕？
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