The 10 largest U.S. ports showed a 0.1% year over year increase with inbound volume in August. This comes after July’s 3.2% increase that itself was a temporary reprieve and was driven by frontloading to get goods in prior to additional tariffs going into effect in August. The slight bounce back came after decreases of 8.3% in June and 6.6% in May. Outbound volume in August was down 2.6% and comes after a 2.0% increase in July and a 1.7% decrease in June.
Inbound In-depth
While the revised reciprocal tariffs went into effect on August 7, there was an exception for goods in transit that buttressed August inbound volume much higher than it would have been. 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. Given that voyages in most key container lanes involving the U.S. take from two to four weeks after the last foreign port of call, that translates into the large majority of boxes coming into the U.S. in August being exempt from the tariffs going into effect on August 7. Indeed, that mechanism could even result in some loads coming into the U.S. in September under normal deployments being exempt. In theory, when you go through the numbers that same mechanism could have incentivized deployment adjustments where ships were loaded by August 7 and slow-steamed to the U.S. This and other ways of avoiding the new tariffs inject spikes in maritime supply chains that can have adverse consequences down the road.
Ports with the strongest August performance were Charleston (up 11.7%), Savannah (up 6.1%) and New York (up 5.3%). The weakest performance during August came in at Seattle/Tacoma (down 24.8%), Long Beach (down 3.6%) and Oakland (down 1.2%).
Full-Year, Inbound Outlook
The full year 2024 saw a 15.2% increase in total inbound loads to the U.S. compared to 2023. To say that the annual total for 2025 will be a diametric contrast is an understatement and more are now agreeing with the point that I have made in many of my reports earlier this year that the tariffs will result in an actual decline in 2025 inbound volume.
Last month we saw further corroboration from the National Retail Federation that 2025 will be negative. I suspect. like me, their estimates did not fully take into account the in-transit exception for containers loaded by August 7. That had the effect of August being similar to July with the first month of a more material impact pushed off until September. In their updated forecast, the National Retail Federation has revised its projection of total inbound volume for 2025 and now expects it to be down 3.4%. When the year to date through August volume increase of 3.1% is taken into account and you go through the relevant numbers, that translates into the remaining four months of 2025 being down 15.7% compared to the same four months in 2024. I believe that is a reasonable estimate. Unfortunately, the volume carnage does not cease at the end of 2025 and will continue into 2026, likely at an even higher level.
In a September 17 presentation reviewing the August performance at the Port of Los Angeles, which had inbound volume decreasing 1.0%, the port director stated they expected inbound volume in September to be down 10% compared to the same month last year.
Yet another tangible indication that we will start to see significant and material drops in U.S. container volume in September comes from published reports on container bookings in the China to U.S. trade lanes. China remains the largest origin point for inbound containers to the U.S. and in May accounted for 29.3% of the total. That is down from what was around 40% at its peak. A noteworthy amount of the decline has resulted from Chinese companies expanding finished production facilities in Vietnam, Thailand and other Asian countries. In any case, those reports had data showing that in the first week of September, bookings for container moves from China to the U.S. were down 26% compared to the same week last year. On the U.S. to China backhaul leg, bookings were down 18%. Keep in mind that those decreases come even though the reciprocal tariffs related to China have been paused until mid-November. If and when those tariffs are implemented, it is highly likely that they would lead to broader declines related to inbound containers to the U.S. from China. Such tariffs would inevitably be retaliated with tariff increases by China and the volume impact in both directions of what is still by far the largest container trade lane involving the U.S. could be significant.
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. The downward turn in 2025 will be due solely to tariffs and unfortunately there is nothing at present that suggests it will be short-lived.
The monthly year over year percent changes in inbound volume to the U.S. since 2019 is detailed in the chart below.
“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.”
Six-Year CAGR
Inbound loads this August compared to August 2019 were 19.4% higher, which is equivalent to a six-year CAGR of 3.0%. That growth rate measure was below the 3.4% in July but well above the 1.6% and 0.8% growth measures for June and May. Those spikes in the long-term volume growth figures are yet another tangible indication of July and August benefiting from pulling forward volumes to arrive before the higher tariffs went into effect. These medium-term comparisons to the same month in 2019 are important metrics that have the effect of jumping over and therefore netting out the roller coaster impact of the pandemic and getting at the underlying growth rate.
The latest actual growth rate of 3.0% compared to 2019 is below the 3.8% ten-year CAGR that total inbound loads grew in the decade from 2010 to 2020. We now may be looking at multiyear declines and will need to arrive at a new equilibrium point from which we can then estimate growth. That figure is likely to be below 2.7% per year given the array of factors now becoming obstacles to trade that did not exist in the past.
Global Perspective
When U.S. container volume data is compared to global data and data in other major areas, there is a noticeable and widening gap as the downtrends in U.S. lanes are being significantly mitigated by increased volume in other areas. One tangible indication of that is that overall container exports from the Far East in July set a new record and were 6.3% ahead of the same month last year. In contrast, in the absence of the frontloading that spiked inbound volume into the U.S., we would have seen July come in at a negative number at least as high as the Far East’s positive number. World container supply chains have already 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.
The gap between U.S. and worldwide container movements favoring the former that was evident in 2024 narrowed in early 2025 and has now gone away completely and inverted. From being well ahead of the rest of world, the U.S. is now well behind the rest of the world. The worldwide volume growth of 5.1% in July was ahead of the measures in the U.S. and that gap will continue and widen in the months ahead.
Economic Impact
To put into better context the commercial activity that could be impacted from container volume declines, the total value of goods in containers moving in and out of all U.S. ports, including the two dozen container ports outside of the Top 10, in August was $192.8 billion. That is the equivalent of $2.314 trillion in annualized economic activity. Growth as well as any constraints in those movements will have pronounced positive and negative effects across the economy. For example, a 25% reduction in overall container volume from this point on based on tariffs is in my view readily possible. That would translate directly into a $578 billion reduction in annual commerce for the U.S. What will fill the void is a different issue, but in any case, it will occur later and involve challenges in how to precisely measure it as well as what to attribute it to. But the initial impact now looks to be significant and it will flow through the economy, adversely affecting everything that commerce touches and invariably resulting in job losses.
Freight Prices
The CTS global pricing index, the definitive measure of overall sector pricing, has come out for July, and at 84 it was 2.3% below the June level of 86. The July index brought the actual trailing three-month average to 82.7, or 3.8% below the actual 1Q25 average of 86.0 and 2.5% above the actual 2Q25 average of 80.7. I view the spike in the June CTS global pricing index as an anomaly driven by temporary capacity issues related to tariffs and the downward bias in pricing has returned. From its recent monthly peak level of 118 in July 2024, before the June spike the global pricing index has generally been declining since then. That July 2024 peak itself resulted from an uptrend since the November 2023 level of 69 and is largely a result of the Red Sea situation.
The latest readings on the SCFI index, the most closely followed spot index measure, augment overall pricing insight into the container sector. The SCFI began trending down last December and that continued through March. In April, it turned and through June recovered some two-thirds of that decline before consistently decreasing since then. The latest SCFI reading of 1198 on September 19 is 27.2% below the average 2Q25 level of 1645 and 32.8% below the average 1Q25 reading of 1784. In fact, that latest reading of 1198 is the lowest the SCFI has been since 12/15/23 when it was at 1094. Note that late 2023 reading was towards the end of the quarter where the industry reported a small loss as the pandemic effect had ended and it was just before the Red Sea situation provided another notable capacity situation that would sharply push up industry results.
Inventory Snapshot
Based on the latest released figures from the Census Bureau, total U.S. business inventories at the end of July were $2,666.7 billion, up $6.6 billion from June’s $2,661.0 billion. My estimate is that the total value of goods in inbound containers to all U.S. ports in July was $120.7 billion. As inbound volume increased 3.2% in July, that would have the effect of increasing the value related to the goods in containers by $3.7 billion. The higher buildup in July suggests some latent effects from June. There was a gain of $4.4 billion even when the volume decline would have indicated a drop of $11.7 billion. While the Census inventory data is obviously impacted by multiple factors, with the simplifying assumption that everything else nets out and June and July changes are driven by containers, I see more than $20 billion in frontloading effect.
When sales are included in the analysis to get the inventories to sales ratio, the actual data shows it was flat to declining. Total business inventories/sales ratio was 1.37 at the end of July, a decrease from the 1.38 figure at the end of June. The July figure was below the 1.40 for July 2024. It may very well be the Census Bureau inventory data is so large and affected by so many variables that it is difficult to isolate the container effect. However, with all the anecdotal references to frontloading, it is a useful factual benchmark.
Inflation
The August inflation rate came in at 2.9% or 0.2% above the July inflation rate of 2.7%. July itself was 0.3% above the June inflation rate of 2.4%. There has been commentary on both sides pointing to what that means related to tariffs. What is not being underscored as much as it should is that August is still too early to make any real assessment on the inflationary impact of tariffs. This has everything to do with several lag effects in terms of timing related to the inflation impact of tariffs.
In some cases, it can actually be months after a container first arrives in the U.S. before the cargo turns into sales based on prices that reflect all costs including tariffs. Note that there can also be a lag effect from the retailer or importer paying the tariff to it actually adjusting its prices. While history has shown and I’m highly confident all of those costs will be passed along eventually, some companies may choose to phase such costs in to minimize news coverage and potential retaliation. In my view, it will not be until at least when the inflation data is released in the fourth quarter that the inflationary impact of the tariffs can begin to be accurately assessed.
Shifting Port Traffic
July and August were temporary respites and declines will return in a much more pronounced way if the announced tariffs and related initiatives stay in place. August’s overall inbound volume was 11.9% above that 61-month average. East/Gulf Coast ports were 10.6% above their 61-month average while West Coast ports were 13.2% above their average. Those respective changes and wider divergences in July are another clear indication that the frontloading due to tariffs was focused on those ports closest to Asia as would be expected, as two-thirds of the boxes coming into the U.S. originate there.
August showed a 9.8 percentage point coastal gap favoring East Coast ports based on a 4.5% decrease at West Coast ports compared to the 5.3% increase at East/Gulf Coast ports. That was a flip from the 7.2 and 1.8 percentage point coastal gaps favoring West Coast ports in July and June.
Even with some rebound in volume to the West Coast, the underlying shift eastward and away from the West Coast since 2016 and the resulting trendline is evident in the following chart. It depicts West Coast inbound volume as a percent of total inbound volume for each month and also shows the trailing three-month average. Over the six-year period, the trendline points to an average shift of 65 basis points per year. If the data were looked at over the eight-year period, the shift would be more in the range of 100 basis points per year. These periods benefited from the expanded Panama Canal and the more than three times larger container ships it allowed so the shift going forward will not be as high. However, my analysis is that there will continue to be an eastward shift in the range of 50 basis points per year. This will be driven by the superior cost economics of moving containers by water as well as relative U.S. population distribution and growth.
This is an excerpt of the McCown Container Volume Observer, which features an exhaustive deep dive into the facts and figures behind U.S. container shipping volumes, including analysis of monthly trends by port and by direction. The observations and data in the 25-page report include some 20 graphs and tables, providing timely container volume and pricing information. To subscribe to The McCown Report, visit The McCown Report site.
About the author: John D. McCown is an internationally recognized shipping expert with over four decades of experience in the sector. He currently serves as a Non-Resident Senior Fellow at the Center for Maritime Strategy, the think tank of the Navy League. McCown was the co-founder and former CEO of U.S. flag container carrier Trailer Bridge, Inc. He also focused on the shipping and transportation industries from an investment perspective as the transport sector head at a $20 billion hedge fund.
