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On this episode of What's Going On with
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Shipping, we update US ports as of May
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4th, 2025. I'm your host, Sal McAliano.
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Welcome to today's episode. So, we're
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doing these periodic updates on what's
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going on with shipping regarding US
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ports because of the tariffs initiated
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by the United States against countries
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around the world, but most importantly,
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China, which is currently sitting at
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145%, not for all goods, but largely
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145%. Now, there's a lot of information
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floating around out there on mainstream
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media, on social media, on on all the
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media platforms. Some good, but a whole
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lot of it is really, really bad because
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a lot of people don't know what they're
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looking at. They they don't understand
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shipping. They're just finding it now.
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They've downloaded an app that shows
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them ships and and they don't quite
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understand it. Uh, I am a former
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merchant mariner. I sail ships for a
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living. I worked ashore for a shipping,
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you know, firm. I I then went into
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academia. I got a masterers in maritime
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studies. is a PhD in maritime history. I
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teach a course for the US Merchant
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Marine Academy entitled Maritime
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Industry Policy. Uh, and I also teach
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classes in maritime security and
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maritime history. So, I know a little
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bit about this. I'm not perfect. Don't
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I'm not the the the end- all beall. I
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make mistakes. Just go ask my wife. Uh,
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but I like to think I can provide you
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some level-headed assessment and more
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importantly, I don't link you over to
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sources that you can go to verify what
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you're seeing out there. But today, what
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I want to do is look at an interview
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done by Jean Soka, the executive
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director of the Port of LA, a consmate
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professional. I mean, just a man who
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knows shipping in and out, probably one
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of the most experienced Americans out
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there when it comes to shipping. An
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interview he did with Bloomberg TV, and
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he hits on a couple of key points that I
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think are essential. If you're new to
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the channel, hey, take a moment,
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subscribe to the channel, and hit the
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bell so you be alerted about new videos
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as they come out. Just describe for us,
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let's take a beat, really frame it for
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us. How much volume has just dropped off
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in the last few weeks? Yeah. About a
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third of the import volume, which means
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give or take about 50,000 20 foot
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equivalent units gone off the arrivals
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coming in next week. From from next week
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is when you expect to see this really
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hit. That's correct. And that matches up
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the announcements back on April 2nd.
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Then on April 8th, a little bit of a
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change on everybody exchina, Mexico,
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Canada. Gene did his interview two days
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ago and when you looked at the data he
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had at that time this week May 4th to
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May 10th was showing a 35% drop across
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the port of LA. The most recent data
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coming out of the port of LA. This is
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their optimizer, their signal optimizer
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report. They put this out daily. It
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shows you estimated arrival of vessels
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and more importantly the number of
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containers coming in. It's showing for
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this week, week 19, May 4th to 10th.
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Instead of a 35% drop, it's showing a
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24% drop. But what it also is showing is
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that some cargo drops are coming in much
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later, too. So, we're seeing 13% for the
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week of May 11th to 17th and then a
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13.5% drop from May 18th to May 24th.
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So, if we're looking at anywhere between
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a 13% and 35% drop in container cargo,
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that is obviously significant. I am not
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undercutting that or trying to minimize
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that at all. However, it is important to
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put it into context. The port of LA,
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this is the numbers for 2024. It shows
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you the tonnage of containerized imports
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coming into the all the ports in the
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United States. At the very top there is
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LA. 51% of the containerized imports for
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2024. If we're talking about a 13 to 35%
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drop in containerized imports coming
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into the port of LA, notice we are not
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talking about the full amount coming in
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from China. I think that is really
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significant. That tells me that cargo
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from China is still flowing into the
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United States. And that's for a variety
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of reasons. Number one, cargo has
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already been booked. You can't turn it
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around. It's it's getting loaded on
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ships. It's going to come this way.
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Second, even with 145% tariff, there may
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be an issue that it's still cheaper to
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buy it from China than anywhere else.
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Manufacturing, you may not be able to
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replace that in any time frame soon
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enough so that you have to get it from
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China. Uh, and then lastly, and we'll
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talk about this a little bit more, it
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may be held in ports or in warehouses
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until the tariffs come down. We're going
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to explain that a little bit more in a
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minute. Just wondering how you're
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anticipating this rolls and ripples
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through the economy from here, how it
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hits trucking, when this turns up on the
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shelf. What's the distance, the time
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from when you see a drop off in volume
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and when we as consumers see the
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shortages? Right? So CEOs are telling
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me, hit the pause button, right? I'm not
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going to import anymore at these kind of
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prices. Let's wait and see. I don't know
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if it's going to be 2 hours, 2 days, or
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2 weeks till I get some clarity. Then
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hiring off the table for right now.
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capital investment pause and the
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retailers are telling me that
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realistically with even the 10% I'm
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going to have to pass it on to the
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consumers. Again, I think Jean's
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assessment spot on. Uh you're seeing
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this issue. So companies are holding,
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you know, basically shutting everything
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down in terms of capital investments.
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There's labor issues. Where this is
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going to hit first in particularly is
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going to be in transportation.
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Particularly, you're going to see a
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slowdown in the US ports. We're seeing
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it already on the West Coast. Seattle is
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not closed. Tacoma is not closed. Got
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people posting that like crazy. It's not
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happening. But there is a slowdown. I
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had posted a picture the other day.
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Friend of mine ship coming out of
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Shanghai and it's light lighter loaded
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than usual. Uh that's what we're seeing.
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Uh we're going to see a slowdown in dock
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workers in their ability to get work on
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the docks. And more importantly, short
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hall trucking and long haul trucking is
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going to be the ones most affected. Uh
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we're definitely going to see that.
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Interesting enough, we're seeing an
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uptick in rail right now, which means a
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lot of cargo is being put on rail to
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move and we're seeing the truckers
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really taking the brunt of this. So, how
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much is this really coming from all
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over? It's not just about China. This is
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about really global trade coming to a
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standstill until there is a much greater
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degree of certainty and a much lower
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tariff rate than even the baseline
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that's been put out there. Yeah. Can I
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just take a moment here and highlight
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the fact that that news commentator sat
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there and said global trade is coming to
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a standstill. That that is grossly in
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incorrect. I I mean, you're a Bloomberg
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reporter. Don't say that. You you cause
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a little bit of panic when you say that
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trade is slowing down. Granted, it is
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slowing down from China to the United
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States in particularly. We're going to
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see that. We're seeing the slowdown on
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the West Coast. We'll see it hit the
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East and Gulf Coast by miday. Uh second,
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third week in May, you'll see it because
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it takes longer for the ships to go
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around uh Africa to to get to the United
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States. So, but don't sit there and say
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it's at a standstill. Uh that's not
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accurate at all. Trade's going to slow.
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Economies will follow. And that's
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exactly what we're seeing. Back in
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November, so many of us were ringing our
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hands about 4% inflation. We've just
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added 10 percentage points to imports
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coming out of Southeast Asia for our
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port and these unbelievable numbers out
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of China. The inflation issue is a big
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one. We're going to see added costs.
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Understand back in Trump 1.0 no tariffs.
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When those tariffs went into effect,
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they were pretty mitigated by a lot of
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factors, not the least of which China
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moved some production offshore so that
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they were going out of Vietnam, out of
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other countries. Uh we also saw that the
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tariffs were kind of lowered at
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different points. Plus, some of the
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transportation costs were eaten by the
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uh the shippers and but that's not the
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case here. You can't swallow 145%
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tariff. That is going to be shared. And
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one of the interesting things to note is
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how that's going to impact US
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manufacturing because when US
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manufacturing is dependent on components
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principally coming from China that's
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going to be built into US manufacturing
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cost. How much are you going to see a
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real decline in dock workers if this
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goes on? Yeah, this is the question. So
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the trucker hauling four or five
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containers today, next week she probably
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hauls two or three. The dock workers are
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no longer going to see overtime and
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double shifts. they're going to probably
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work less than a traditional work week
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starting right off the bat. Every four
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containers mean a job. So when we start
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dialing this back, it's less job
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opportunity. So that stat right there, I
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think, is one of the key ones that Gan
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talks about. Every four containers less
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coming in the port is one less short
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hall draage driver because they can
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usually do three to four containers a
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day. That is significant. You're going
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to see dock workers who are not going to
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be employed. Now everyone's screaming at
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the at at the screen right now. Al, this
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is why they need to go with automation
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and not use these damn dock workers.
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First off, the West Coast, Port of LA
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has one of the most automated ports in
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the country. APM terminal is automated.
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Uh, Treyac has automation. The West
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Coast has automation. Understand the
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shipping companies wanted automation in
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one area in the United States and they
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wanted to go into the biggest ports in
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the country to put automation and that's
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why they went into LA and Long Beach and
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automated the crap out of the ports so
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that they can do this. The other thing,
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the reason they didn't want automation
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in other ports is so that they don't
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have to pay dock workers when things
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slow down like this. So they can just
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slow down the ports and not have to pay.
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And so when everybody's screaming about
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dock workers, put that in the back of
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your your mind. And what happens if we
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get a deal? If we get a deal, it's going
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to take about a month. Let me walk you
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through that real quick. About two weeks
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to get the ships repositioned around
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these major ports from Chingda to
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Shanghai to Jia. load up all those
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containers and then another two weeks to
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steam across the Pacific to get to us.
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This is important because now we're
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talking about spring and summer fashion.
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So, we're kind of at a crux here that
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we've got to have something pretty
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quick. So, that's the other part that
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we're not talking about a lot. Should
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the tariffs come down, should they go
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away, should they be reduced, should we
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get the bullhip effect whereby all of a
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sudden the ports are wide open and
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shipments start flowing across the
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Pacific to the United States. It's going
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to take time. It's going to take time to
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reset, to reposition the ships, and then
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to come in. I want to note a couple
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things that Gene did not put in here.
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Number one, we're just seeing right now
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a big reshuffle in the large container
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companies in their alliance system.
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Ships, shipping companies, the top 10
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shipping companies in the world, control
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85% of all the uh containers afloat.
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They do it in four big alliances. Well,
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those change in February of 2025. And
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so, they're reshuffling ships on their
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route. So, they're all busy trying to
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readjust that. Second, because of the
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proposed fees on Chinese-built and
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Chineseowned ships, one of the things
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we're going to see is some companies are
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going to start pulling those
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Chinese-built ships off US service. And
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this gives them an opportunity to do
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that. They can gap a a a sailing. They
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can what's called blank sailing, not
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actually do a scheduled sailing, and
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they can reposition. But the fear here
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is that if the tariffs go away, let's
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say June 1st, you're going to have a
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huge influx of cargo coming in and we
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may overload the ports to refill the
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warehouse space that has been depleted
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now over the past. Uh Gene estimates
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that that a lot of companies have
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anywhere from 5 to 7 weeks worth of
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warehouse supplies stored up prior to
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the initiation of the tariffs. Now we'll
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see a big huge influx and what we may
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see is something similar to we saw in
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2021 where we had a massive ships come
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into the United States but the
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intrammoal system within the United
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States the docks the ports the rail the
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trucking uh the all the infrastructure
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inside the United States cannot handle
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that huge influx that's a big danger we
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should be thinking about have a story
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out was anecdotal reporting as well
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we've heard about China quietly starting
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to exempt about a quarter of US imports
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are any US importers exempting Chinese
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tariffs is Is there a way to get around
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the 145%. Not really. There may be some
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exceptions, Amarie, maybe a little bit
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going north or south of us, but
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realistically speaking, nobody is out
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there talking a lot about, hey, I got a
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better deal coming out of China right
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now. So, getting around the tariff, I
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want to talk about this because I got
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recommended over to a video here over at
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F-Stoppers. One right here, why Trump's
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tariffs hasn't affected us yet. He
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imports bottles for a hot sauce company
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that he runs and the bottles come from
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China. And what was interesting is he
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was facing the issue of having to pay
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tariffs on it. First off, the tariff
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wasn't clear to him for a variety of
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reasons. When his bottles arrived, the
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tariff was only at 45% because it was
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the tariff is a fixed based on the date
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you loaded it in China. And he was uh
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basically given that tariff at the point
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before it escalated up to 145%. But you
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do have some options when the cargo
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lands in the United States. Let me walk
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through these real quick because a lot
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of people are asking about this. When
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the cargo lands in in in a port in the
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United States, you're given so many
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what's called free days. In other words,
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how many days you can leave the
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container on the port in the terminal
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and it's anywhere from 1 to nine most
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cases and you usually have a set amount
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of times. If you leave it on the port
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longer than that, then you get charged
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what's called demmerge. It's like a
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holding fee. You get paid. It's a late
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fee to getting it off the terminal. Uh,
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but you do not pay the tariff until you
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pick the container up and take it off
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the terminal. It will not leave the
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terminal until the tariff is either paid
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or you secure a bond for it. If you
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secure the bond for it, then you're
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going to pay it over time, but you've
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put collateral up against it. The other
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option is it can be moved off the
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terminal to a bonded warehouse where
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it'll be held in the bonded warehouse
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until you claim it and then you pay the
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tariff as of that day. So, if the tariff
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goes down, you get a lower price for it.
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The problem is there's finite amount of
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bonded warehouses out there. A lot of
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them are full cargo right now and so
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there's a lot of issues with it. The
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other option you have is to ship it back
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to China or wherever you got it from,
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but that's on you to go ahead and ship
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it back. And will they accept the cargo
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back for it? Uh, also I should mention
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that if you pull it off the terminal and
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then you hold it and you don't open it
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in that bonded warehouse, you will pay a
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detention fee for keeping the container
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late. So I mean there's a lot of fees
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associated here. A lot of companies are
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trying to do this too through Canada and
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Mexico. They're offloading their cargo
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in Canada and Mexico. Understand if you
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come through Canada and Mexico, you're
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still going to get charged the China
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tariff. They don't charge it from what
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country it's immediately coming from.
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It's where the cargo originated. They're
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holding it in Canada and Mexico waiting
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for the cargo tariff to go down. Then
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they can stream it across the border.
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So, there's a lot of issues at play
00:14:00
here. Uh you have got to pay this tariff
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and and companies are already seeing
00:14:05
that. CBP, Customs and Border Protection
00:14:07
will levy that tariff. you'll see it
00:14:09
almost immediately. The Flexport CEO
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joined us earlier in the week and he
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said ocean Fright is down 60% from
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China. When do we see 100%.
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Good question. It depends on how long
00:14:20
this goes. Uh we heard the reports
00:14:23
overnight through through Bloomberg that
00:14:25
the folks in China are thinking about
00:14:27
talking. What does that mean? Okay,
00:14:29
great. But we've got to get a move on
00:14:31
here. So they're referencing Ryan
00:14:32
Peterson, the CEO of Flexport. There's a
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big article about Flexport and Ryan
00:14:38
Peterson over in the Wall Street
00:14:40
Journal. Uh we've been talking to each
00:14:41
other since the Evergiven in in the Suez
00:14:44
back in 2021 when I started my channel.
00:14:46
As a matter of fact, and I I I kind of
00:14:48
don't like the hyperola, so to speak. I
00:14:51
I like Ryan. I I know a lot of people
00:14:53
he's a very polarizing figure in many
00:14:55
ways. But there's a statement here I
00:14:57
want to highlight. Peterson is
00:14:59
explaining to anyone who will listen why
00:15:00
hefty US tariffs on Chinese imports
00:15:02
could be catastrophic for America's
00:15:04
small businesses. Quote, "If they don't
00:15:05
change the tariffs, it's going to be an
00:15:07
extinction level asteroid wiping out the
00:15:09
dinosaurs kind of event." Uh only these
00:15:12
aren't dinosaurs. These are dynamic
00:15:14
healthy businesses. Okay, I think that's
00:15:16
a little bit on the extreme side. I
00:15:19
understand what he means. Small
00:15:20
businesses have very thin margins. Uh
00:15:22
they cannot absorb these costs like
00:15:24
large larger companies can. 100% agree
00:15:26
with that. However, I I think you got to
00:15:28
be careful about creating the issue here
00:15:30
of a little bit of panic in some ways.
00:15:32
Uh companies are dealing with this.
00:15:34
Smaller companies who are shipping over
00:15:36
finished products, products that are
00:15:38
ready to go, are going to have to pay
00:15:41
145% on that total element. If you were
00:15:43
like Evtoppers and you're just shipping
00:15:44
over the bottle the hot sauce goes in,
00:15:47
that's only a portion of the overall
00:15:49
cost of that product. they are more
00:15:51
likely to be able to consume that cost
00:15:54
and transfer it on to the consumer. Uh
00:15:57
so I I think we have to have a little
00:15:59
bit of of care. We had to be a little
00:16:01
more careful in some of our statements.
00:16:02
Now I will agree with Ryan here. The
00:16:04
more companies that Peterson spoke with,
00:16:06
the more he felt that he needed to speak
00:16:07
up for them. Quote, it was just very
00:16:09
obvious that they felt really helpless
00:16:10
and that nobody was explaining their
00:16:12
point of view. Nobody had their back.
00:16:15
And so he has spent the past week in
00:16:17
Washington DC kind of explaining the
00:16:20
impact tariffs are having. I think Ryan
00:16:22
is is exactly right about that. I think
00:16:24
that the big companies, the
00:16:25
corporations, the CEOs of Walmart and
00:16:27
Target are able to get in with Trump. If
00:16:29
you are a small business owner, you
00:16:30
don't have that ability to do that. And
00:16:33
again, we're not articulating correctly
00:16:35
the impact this is having. One of the
00:16:36
reasons I'm doing this channel is to
00:16:38
talk about this impact that we're
00:16:39
seeing. All right, let's go back to
00:16:40
Jean. When do we see 100%.
00:16:43
Good question. It depends on how long
00:16:46
this goes. So, I think Jean's statement
00:16:47
there is really important. I again, why
00:16:50
are we talking about 100%. There's no
00:16:51
way we have 100% no cargo coming from
00:16:54
China. It's unrealistic. It just it's
00:16:56
not going to happen. Even with 145%
00:16:59
tariff, we're still going to get
00:17:00
shipments out of China. And if you look
00:17:02
at Gan's numbers, we're seeing that
00:17:04
right now. And understand, we haven't
00:17:05
seen it yet on the East and Gulf Coast
00:17:08
ports yet. Back to this chart and the
00:17:09
talk about, for example, the port of
00:17:11
Newark is empty. Well, the port of
00:17:12
Newark is not empty. Newark only
00:17:14
receives 23% of its cargo from China.
00:17:17
Savannah only gets 29% of its cargo from
00:17:20
uh China. Houston only receives 25% of
00:17:23
its cargo from China. Those are the
00:17:25
three biggest ports on the East and Gulf
00:17:27
Coast port. So you're talking about a
00:17:28
quarter to maybe a third of the cargo
00:17:30
coming in. We're not going to see a
00:17:32
precipitous, you know, emptying of the
00:17:34
ports. What we are going to see is
00:17:36
efforts being done to shift cargo
00:17:38
sources out of China to other places.
00:17:41
We're also going to try to see some
00:17:43
getting around this. I mean, we're going
00:17:44
to see some cargo moved around through
00:17:46
ports trying to mask it and where it's
00:17:49
coming from. So, I mean, that's that's
00:17:50
another element we haven't even gotten
00:17:52
into yet. So, what are my big takeaways?
00:17:54
First, consumers will see prices
00:17:56
increase due to the tariffs and because
00:17:57
of the increased warehouse causes costs
00:18:00
caused by the front loing of cargo
00:18:01
during the end of 2024 and the beginning
00:18:03
of 2025. Second, any change in the
00:18:05
tariffs will cause more disruptions,
00:18:08
including a reduction in them. I mean,
00:18:10
even if we reduce the tariffs, we're
00:18:12
going to see disruptions. There's no
00:18:13
question about that. Third, this is
00:18:14
hitting the west coast this week, it
00:18:16
will hit the eastern Gulf Coast in two
00:18:18
weeks. Fourth, ships are still sailing
00:18:20
from China and ports are still seeing
00:18:22
ship arrivals, but at lower levels, and
00:18:24
ships coming in lighter. And then
00:18:26
finally, the other question should be,
00:18:27
how will this impact US exports, grain,
00:18:30
energy, and manufactured goods? I will
00:18:32
probably tackle that last one, exports,
00:18:34
in an upcoming video because it's a very
00:18:36
complicated subject. I need to make sure
00:18:38
I have all my data on it on grain, on
00:18:40
bulk, on oil, on LNG. Uh, all that
00:18:43
really needs to be covered. If you want
00:18:45
to catch and really understand what's
00:18:48
going on the ports, not just right now,
00:18:49
but historically speaking, let me
00:18:51
recommend one site to you and that is
00:18:53
the IMF port. A great site for a variety
00:18:56
of issues. Use this a lot for tracking
00:18:59
the Red Sea and what was happening with
00:19:01
the diversions. If you go to port
00:19:03
monitor in the IMF portwatch, you can
00:19:05
type in the name of a port. it will come
00:19:07
up. For example, here is LA and Long
00:19:09
Beach. You'll see some data on it. What
00:19:11
are the three uh biggest traded
00:19:13
industries? What share of the economy is
00:19:15
imports exports? But then you get data
00:19:18
like this, which I think is really the
00:19:20
key here. You get port calls. For
00:19:22
example, this is the port calls over the
00:19:24
past year. So, are we seeing reductions
00:19:26
in port calls? You'll see right here,
00:19:28
this is the data for April 24th. Now,
00:19:30
it's lagging a bit. It's going to take a
00:19:31
week or two for the data to be
00:19:33
accumulated, but on April 24th, the
00:19:36
7-day average was 12 vessels. Uh over
00:19:39
the past 7 days prior to that, there
00:19:40
were 10 vessels import. So, a little bit
00:19:42
of a reduction, but then you could do
00:19:44
the same thing for import volume. So,
00:19:46
are we seeing the same import volume?
00:19:48
Again, this is as of April 25th. The
00:19:51
average is 556,000 tons. We saw 540,000
00:19:55
tons coming in. And then export, same
00:19:59
thing. You can see it here. Now, notice
00:20:00
it uh it moves in kind of uh spurts
00:20:04
here. It's not a a constant kind of
00:20:05
steady flow. And this is why looking at
00:20:07
the 7-day average is really important
00:20:09
here. Exports, we see the export volume
00:20:12
here is 825,000. The 7-day average was
00:20:16
532,000. But again, you if you look at
00:20:18
exports here, it depends on the number
00:20:20
of ships that are leaving at any given
00:20:22
time. So hopefully this gives you a good
00:20:25
picture of what's going on. I thought
00:20:27
Jean's statement was really good with
00:20:28
some caveats in there. But I just can't
00:20:30
recommend enough taking a moment and not
00:20:33
taking for granted what some people are
00:20:34
posting on social media and even in the
00:20:36
mainstream media. Just take a moment and
00:20:38
and really try to look at it. I'll put a
00:20:40
Q&A, a pinned Q&A uh below. So, if you
00:20:43
have questions about that, feel free to
00:20:44
ask about it. And I hope you enjoyed
00:20:46
today's episode. If you did, hey, take a
00:20:48
moment, subscribe to the channel and hit
00:20:49
the bell. A real big shout out to the
00:20:52
roughly 50,000 new subscribers I picked
00:20:54
up over the past week. Unbelievable. Uh,
00:20:56
thank you so much for subscribing.
00:20:58
Please take a moment, share this with
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your friends, put it out on social
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00:21:07
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00:21:14
Hey, subscribe, hit the bell, give it a
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00:21:27
Until our next port update or just news
00:21:29
here at what's going on with shipping,
00:21:31
this is Al signing
