Recent data from American ports reveals significant changes in global trade flows, with container volumes showing unexpected declines that may indicate broader economic shifts. The latest Descartes Global Shipping Report provides critical insights into these emerging trends.
Alarming Drop in May Imports
The Descartes report shows U.S. container imports fell 9.7% month-over-month and 7.2% year-over-year in May, totaling 2,177,453 TEUs (twenty-foot equivalent units). This marks the first substantial contraction since the beginning of 2024, interrupting what had been a period of steady growth.
Jackson Wood of Descartes attributes this decline primarily to changing trade policies : "After months of import growth and April's front-loading surge, the impact of new tariffs became evident in May. Policy shifts between the U.S. and China are clearly reflected in monthly trade flows."
While the 90-day tariff reduction agreement between the U.S. and China provided temporary relief, analysts suggest this may not reverse the long-term trend of declining imports from China as businesses reevaluate their supply chains.
Historical Context: An Unusual Seasonal Pattern
May typically represents a period of trade expansion, making this year's contraction particularly noteworthy. Excluding pandemic-affected 2020, 2024 marks the first time in seven years that May imports have declined month-over-month.
Despite the drop, imports remain 4.3% above pre-pandemic 2019 levels , suggesting underlying demand persists even as trade patterns shift. Year-to-date imports through May still show 5.3% growth compared to 2024, though the gap is narrowing.
China's Dramatic Decline
The most striking development comes from China trade data:
- 20.8% month-over-month decline (804,122 TEUs)
- 28.5% year-over-year decrease - the steepest since March 2020
- China's share of U.S. container imports fell to 29.3% , a two-year low
West Coast ports dependent on Chinese trade saw the most severe impacts, with Long Beach down 31.6% and Los Angeles 29.9% . This suggests companies are actively diversifying supply chains away from China in response to tariffs and geopolitical tensions.
Regional Port Performance Diverges
The Descartes report reveals significant regional variations:
Top 10 Ports
- Collective throughput down 10.7% year-over-year (217,112 TEUs)
- Los Angeles (-18.4%) and Long Beach (-22.4%) accounted for over 170,000 TEU reduction
- Charleston (+6.0%) and Baltimore (+2.6%) showed growth, indicating shifting trade routes
Top 10 Origin Countries
- Overall imports down 11.4% month-over-month (192,313 TEUs)
- China's 20.8% decline represented over 167,000 TEUs
- Italy (-23.1%), Hong Kong (-14.4%), and Thailand (-11.8%) also saw significant drops
- India (+5.7%), South Korea (+4.9%), and Vietnam (+2.3%) gained, suggesting trade diversion
Geographic shifts are evident in port market share, with East Coast/Gulf Coast ports increasing to 44.5% (+3.1%) while West Coast share fell to 38.1% (-4.4%).
Broader Implications
These developments reflect several critical trends:
1. Trade Policy Complexity
Beyond tariffs, regulatory changes including safety standards, certification requirements, and quota systems create additional barriers. The adjustment to low-value import (de minimis) rules has particularly impacted certain sectors.
2. Geopolitical Reshaping of Supply Chains
Companies are accelerating "China plus one" strategies, with production shifting to Vietnam, India, and Mexico. Nearshoring to Mexico and Canada is gaining traction to reduce transit times and costs.
3. Economic Uncertainty
Potential U.S. recession risks could further suppress import demand, while currency fluctuations add another layer of complexity to trade calculations.
Strategic Recommendations
Businesses should consider:
- Supply chain diversification across regions and suppliers
- Enhanced visibility through digital tracking systems
- Comprehensive risk assessment frameworks
- Investment in automation and AI for demand forecasting
For policymakers, key priorities include:
- Supporting multilateral trade systems
- Negotiating new trade agreements
- Modernizing port infrastructure
Looking Ahead
The Descartes data suggests we may be witnessing a structural realignment of global trade rather than temporary fluctuations. While U.S.-China trade will remain significant, its relative importance appears to be diminishing as companies establish alternative supply networks.
Future trade patterns will likely emphasize:
- Regionalization through new trade blocs
- Digital transformation of logistics
- Sustainability requirements shaping trade flows
These developments present both challenges and opportunities for businesses navigating an increasingly complex global trade environment.