High Tariffs & Idle Capacity: Customs, Intermodal Coordination & Dynamic Pricing Secure Margins

E-commerce Setback: New Tariff Policies and Enhanced Import Audits Roll Out Simultaneously

At the end of April, Washington ramped up the trade war by introducing a new round of tariff measures and strengthening import audits. The White House confirmed that, starting May 2, the de minimis exemption for small packages from Hong Kong, China, will be eliminated—low-priced e-commerce goods will no longer enjoy duty-free clearance. Meanwhile, punitive tariffs on Chinese goods will be significantly increased to 125% to 145%. Industry experts warn that this heavy-handed move may severely impact the China-US air cargo market.

A forecast model predicts that, as platforms like Temu and Shein scale back shipments, air cargo revenue is expected to lose more than $22 billion over the next three years. For logistics companies heavily reliant on the China-US routes (such as Atlas Air and direct package forwarders), the tariff impact will lead to a sharp decline in demand and operational challenges.

Tighter Import Compliance: Unprecedented Enforcement Intensified

According to data from U.S. Customs and Border Protection (CBP), nearly $310 million worth of underreported or misreported duties were identified in March, a staggering 10,590% increase from February. This highlights the U.S. government’s zero-tolerance approach toward smuggling and underreporting. Approximately $49 million has been recovered so far, and the remaining unpaid duties are being aggressively pursued, putting unprecedented pressure on importers.

At the same time, the U.S. government, invoking the International Emergency Economic Powers Act (IEEPA), has imposed an additional 25% tariff on certain goods from Canada and Mexico (with some energy and potash items facing a 10% tariff). These tariffs, which exceed the scope of the United States-Mexico-Canada Agreement (USMCA), were introduced to combat the fentanyl crisis and illegal immigration and are still being enforced. In March alone, tariffs collected from Mexico amounted to $2.87 billion, while those from Canada totaled $1.04 billion.

The logistics industry has swiftly responded: unable to keep up with the new formal customs procedures, DHL temporarily halted some B2C small package shipments to the U.S.

Compliance is the Lifeline, Documentation Errors Double the Cost

Key Highlights:

Tax arrears surge: CBP identified $310 million in underpaid duties in March, a staggering 10,590% increase, with collection efforts fully underway.
New tariffs continue: Tariffs under IEEPA apply additional 25%/10% rates on non-USMCA goods.
Tax revenue surge: The U.S. collected nearly $3.9 billion in tariffs in March, with $2.87 billion from Mexico and $1.04 billion from Canada.
Logistics adjustments: DHL and several other international couriers have tightened or suspended some U.S.-bound package shipments.

Three Pieces of Advice for Shippers:

Compliance is the red line: Ensure all customs documentation is complete and accurate to avoid underreporting, misreporting, and omissions.
Allow for buffer time: New procedures may cause customs delays, so plan for extra time in the clearance process.
Reevaluate total costs: Include tariffs, late fees, and compliance costs in procurement budgets to avoid exceeding projections.

In a world of heightened regulation, “compliance first, logistics second” has become the golden rule for global trade. Only by building a robust compliance, risk management, and contingency system can businesses weather the “tax storm” and ensure supply chain stability.

Chinese Shipping Faces New Port Fees

As part of efforts to curb China’s maritime influence, U.S. regulators have announced new port fees for container ships operated by Chinese shipping companies docking at U.S. ports. Initially proposed as a fixed fee of millions of dollars per ship, the policy was adjusted in response to strong industry opposition, now charging based on ship tonnage or container volume.

Nevertheless, Chinese state-owned shipping giant COSCO publicly condemned the measure last week as “discriminatory” and warned that it would “threaten the stability and sustainability of global supply chains.” The port fees are based on a U.S. trade investigation that concluded China unfairly dominates the shipbuilding and maritime sectors. While the U.S. aims to support its domestic shipowners and shipbuilding industry, the new fees could result in two major ripple effects for shippers: First, large Chinese vessels may reduce their U.S. port visits; and second, freight costs are expected to rise alongside the new fees.

Summary: Trade policies are no longer confined to tariff wars; shipping vessels themselves have become new targets for policy strikes.

Trans-Pacific Shipping Slows Down, Triggering “Port Hopping” Trend

Recently, with a sharp decline in U.S.-China trade volume, the shipping market is facing a new wave of “empty ship” challenges. Container bookings from China to North America have plummeted by about 20% year-on-year, with many factory orders shifting to Southeast Asia, and importers hitting the “pause” button due to tariff uncertainties. As a result, a surge of “port hopping” voyages has emerged, with shipping companies canceling scheduled sailings to avoid the losses caused by “half-filled ships.”

According to the latest analysis from Sea-Intelligence, the planned capacity for voyages to the U.S. West Coast during mid-spring (weeks 16 to 19) has been significantly reduced by 12% compared to six weeks ago, leaving approximately 1.37 million TEU. Capacity on East Coast routes has also dropped by 14%. Even more shocking, empty container capacity surged from 60,000 TEU to 367,800 TEU in just a few weeks, nearly 370,000 TEU of capacity “evaporating” almost instantly.

Although this move helps shipping companies stabilize freight rates, it has put cargo owners relying on the “on-time arrival” model into a scramble for space. Risks of delays and increased transshipment costs are soaring, and before regular schedules are restored, the supply chain will face unprecedented challenges.

Plans Fluctuate with the “Tariff Rollercoaster”

Industry insiders are widely lamenting that the current sporadic tariff policies have made any long-term planning virtually impossible. Shipping companies and cargo owners have had to “react daily” — every time a new tariff or exemption policy is introduced, they must immediately adjust their space allocation and sailing schedules.

Atlantic Routes Remain Relatively Stable: Due to a 90-day reciprocal duty-free period between the U.S. and Europe, the capacity on Atlantic routes has remained relatively steady.

Pacific Routes Are Unpredictable: Some importers humorously remark that the Pacific routes experience “a new tariff battle every week,” with a constant stream of additional fees and new regulations.

Rush to Ship Dies Down: Many U.S. importers had rushed to ship large quantities at the end of 2024 and into 2025, attempting to avoid future tariff hikes. However, this wave of “front-loaded shipments” has quickly dissipated, leading to a surge in empty container rates on departing vessels.

Sharp Decline in Booking Volumes: Hapag-Lloyd revealed that since the tariff increase in April, bookings on the China-U.S. route have dropped nearly 33%.

This supply-demand “whiplash” effect first caused ports to become overwhelmed with excessive cargo, and then quickly shifted to a “space scramble.” In an environment where space allocation and scheduling are frequently restructured, the resilience and flexibility of the supply chain are facing unprecedented limits.

The Empty Container Dilemma: The “Empty Box Storm” Stranding North America

As the import peak recedes, empty containers are piling up across North America. In the past, these empty containers would typically be loaded onto export voyages back to Asia. However, with a large number of vessels “skipping” their scheduled sailings, a “no ship to load” dilemma has emerged. Veteran multimodal analyst Larry Gross warns, “An empty container congestion storm is coming!”

Rail Transport Ready to Spring into Action

BNSF and Union Pacific have stated that, after the port congestion during the pandemic, they have established more flexible equipment allocation mechanisms. They are closely monitoring container volume trends and are prepared to respond to container scheduling demands at any moment.

Upgraded Terminal Storage

Major West Coast ports have committed to expanding their yard space after learning from past congestion issues. They have increased container storage capacity to handle the next round of empty container returns or import peaks.

Cargo Owner “Positioning” Strategy

Currently, cargo owners are actively tracking the dynamics of empty container inventory—on one hand, they are concerned about coastal yard overloads due to the buildup of empty containers, while on the other, they worry about shortages of containers at inland distribution centers. If transpacific shipping capacity fluctuations continue, cargo owners should consider:

Flexible Routing: Explore alternative export routes, such as bypassing bottlenecks via Europe or Latin America.
Diversified Sourcing: Spread supply sources to reduce dependence on a single route and minimize risk.

Preventing the “Empty Container Crisis”:

Real-time Monitoring: Use digital platforms to track empty container locations and availability changes.
Backup Plans: Establish backup contracts with multiple container suppliers and shipping companies to ensure flexible scheduling.
Port Rotation: Strengthen coordination between ports and inland stations to promote moderate internal circulation and reduce long-term empty container stagnation.

In this “empty container battle,” those who can secure container availability first and quickly switch routes will turn passive challenges into active solutions, stabilize the supply chain rhythm, and gain a market advantage.

U.S. Ports and Trucking: Slowdown Imminent

Los Angeles-Long Beach Duo Slowing Down

North America’s busiest import hubs—Los Angeles and Long Beach ports—are facing an unprecedented slowdown. Latest data shows that daily container bookings at the Port of Los Angeles have decreased by about 19% compared to the same period last year, with bookings from China plummeting by 20%. Overall throughput has dropped to levels near those seen during the 2020 lockdown period.

Truck Transport Chain Under Pressure

With a significant reduction in container volumes at the ports, trucking companies in the San Pedro Bay area are feeling the impact of drastically decreased business. Spot freight rates are under downward pressure, and the risk of empty loads has increased significantly. Gene Seroka, Executive Director of the Port Authority, expects that port cargo volumes could continue to decline by 35% in the coming weeks, as major retailers are halting orders from China and reassessing their logistics strategies under tariff pressure. For supply chains relying on the “just-in-time arrival + direct truck delivery” model, this represents a serious challenge.

The End of the “Full Load” Era in Southern California

Truck operators long dependent on West Coast imports are facing unprecedented “empty load” pressures: outbound truck volumes in the Greater Los Angeles area have dropped to their lowest level since 2019 (except for the spring 2020 pandemic period). In the race to secure limited cargo, fleets are competing fiercely, with spot freight rates continuously declining, and the issue of excess capacity becoming more severe.

Wakool’s Suggested Strategies for Carriers to Tackle the Challenge:

Diversify Routes and Cargo Sources: Don’t limit operations to the West Coast; consider expanding to East Coast ports and Midwest inland markets.
Flexible Asset Allocation: Ensure rapid rotation and allocation of trailers, drivers, and other resources between regions.
Intermodal Cooperation: Work closely with rail and warehouse partners to develop new cargo sources and integrated logistics service models.

Not only has coastal truck business been hit hard, but domestic manufacturing freight is also beginning to weaken. For example, Volvo Trucks North America announced a 350-person layoff at its Virginia plant due to tariffs and market uncertainty. Since January, nearly 1,000 jobs have been cut in the U.S. truck manufacturing industry. The slowdown in new truck orders further reflects how fluctuating trade policies continue to impact the entire industrial supply chain.

Wakool’s Response Measures

To stabilize profits amid market fluctuations and avoid getting caught in price-cutting negotiations due to declining freight rates, Wakool Transport has implemented the following strategies:

Volume Contracts + Lock-in Minimum Price: For customers with stable shipping volumes who wish to lock in capacity in advance, we offer minimum load agreements, ensuring a baseline capacity even during off-peak seasons, and securing a price floor.
On-Demand Dynamic Pricing: For customers who only place orders during low-rate periods and have variable shipment volumes, we recommend a pure Spot Rate dynamic pricing model. There is no minimum volume commitment required, and they can access the lowest market rates in real time.
Rate Flexibility + Dynamic Pricing Platform: We adjust freight rates based on real-time supply and demand dynamics, offering limited-time discounts during the off-season and prioritizing capacity allocation during peak seasons. Customers will enjoy additional discounts and capacity guarantees.
“Total Link Cost” Management: We will provide detailed cost breakdowns for customs duties, warehousing, detention charges, and secondary rescheduling. This enables you to fully understand your “total link cost,” helping you avoid making decisions based solely on low freight rates. This approach will allow you to maximize value in overall supply chain optimization, achieving a win-win with Wakool.

Shipper’s Response: Seize the West Coast “Buffer Window” and Diversify Ports and Sources

Short-Term Advantage: Smoother Customs Clearance

Currently, there is ample space at the docks of Los Angeles and Long Beach ports, and container turnover speed has noticeably increased, contrasting sharply with the severe congestion during past peak periods. If the goods are not yet subject to high tariffs, shippers can take advantage of this opportunity to expedite passage through the West Coast channels and adjust inventory layouts, enhancing supply chain efficiency.

Diversification of Sourcing: Avoiding China’s Tariffs

Some businesses have actively explored alternative production sources, such as Vietnam and India, in an effort to avoid the high tariffs on Chinese exports. However, building and maturing a new supply chain system will take time, so it is unrealistic to expect immediate results.

Multi-Port Coordination: Hedging West Coast Risks

More and more shippers are turning to East Coast and Gulf Coast ports, rationally distributing their cargo to mitigate the risk of capacity fluctuations due to “port skipping” or other uncontrollable factors that could cause volatility in West Coast shipping.

Close Monitoring: Prepared for Both Ups and Downs

In the coming months, if trade tensions ease or tariff policies loosen, import volumes may rebound quickly; however, if the current downturn persists, it will be essential to prepare for a longer-term low in trans-Pacific shipping, with appropriate capacity and storage planning.

In this “great reshuffling” of the West Coast, shippers who can quickly set up multi-port and multi-source strategies, and flexibly switch transport channels, will gain the upper hand in a turbulent market and secure a competitive advantage for the future.

Cross-Border Freight Crisis · US-Canada Trade Cools

With the introduction of the latest US tariff policy, the US-Canada freight market immediately hit the “pause button.” According to a survey by the Canadian Trucking Alliance, nearly 70% of Canadian trucking companies reported that, following the implementation of the new tariffs, transportation orders to the US had to be interrupted or canceled. Bulk commodities such as agricultural machinery, fertilizers, timber, and auto parts are being “returned,” and importers and exporters are struggling to cope with the sudden 25% tariff, leaving them confused about who will ultimately bear the increased costs.

Both Sides Are Trying to Salvage the Situation: Some companies are using bonded warehouses to buffer the tariff impact, while others are urgently arranging “just-in-time” air freight to ensure the supply of critical goods. However, in reality, a large volume of goods is still unable to move smoothly. The Trucking Alliance further disclosed that about 8% of fleets have been forced to lay off staff due to a sharp reduction in freight volume. If the situation continues to worsen, 60% of Canadian logistics executives are warning that their companies may face a “life-or-death” crisis. As the alliance president stated, if large-scale capacity withdrawals occur, US-Canada freight may truly enter a “nuclear winter.”

Tit-for-Tat Tariff Conflict

The United States has imposed a 25% tariff on Canadian products such as wheat, timber, and auto parts (with some energy products taxed at 10%), and Canada quickly retaliated by applying a 25% tariff on about $30 billion worth of US products. However, the Canadian trucking industry has noticed little change in the import volume heading north from the US. Around 70% of the fleets surveyed reported that the “northbound” transportation was largely unaffected. This suggests that this round of tariff retaliation has primarily impacted Canada’s “southbound” exports.

Given that 80% of US-Canada trade relies on road transport, the Canadian trucking industry is hit the hardest. The drop in southbound shipments has led to a surge in empty container rates, with idle capacity flooding back into the domestic market, triggering intense competition for load assignments and a sharp decline in freight rates. If this situation continues, it will essentially cripple the industry. For Canadian manufacturers and farmers, the disruption of their largest export market means inventory pile-up and a sharp increase in cash flow pressure. For US importers, price hikes and stock shortages are becoming the new normal.

The overall efficiency of the bilateral supply chain has been severely disrupted: trucks with return loads are forced to run empty, causing unit transport costs to rise sharply.

For cross-border logistics providers, the only way out is to seek a solution through diplomatic channels as soon as possible, or at least obtain clearer operational guidance. Otherwise, traders and carriers will need to prepare for prolonged delays, high costs, or even the worst-case scenario where some fleets abandon the US-Canada cross-border route altogether.

Industry Response and Strategic Investment

Even amidst dramatic changes in the trade and logistics landscape, industry activities continue to reshape. Several leading logistics companies are actively positioning their supply chain networks for the “new normal” through mergers, acquisitions, and infrastructure expansion:

CEVA Logistics’ Diversified Strategy

Global third-party logistics (3PL) giant CEVA Logistics invested $400 million to acquire a Turkish logistics provider, expanding its Eurasian hub capabilities and reducing reliance on China’s single-source production.

AIT Strengthens Latin American and Air Freight Networks

US logistics company AIT Worldwide Logistics acquired a local Miami freight forwarding company to enhance connectivity in the Latin American market and improve air freight network integration, providing more alternatives for the Americas-Asia trade routes.

UK Auto Parts Manufacturer Builds Plant in Mexico

A British auto parts manufacturer announced the construction of a wiring harness factory in Mexico, seizing opportunities for North American localized production to meet US market demand for “Made in America” components and avoid Asian import tariff barriers.

ILS Expands Southwest Cross-Border Logistics Facilities

Arizona-based logistics service provider ILS has built a dedicated cross-border freight center to support the US-Mexico trade flow through the Southwest border, highlighting the importance of nearshoring and the Mexico-US supply chain corridor.

Meanwhile, logistics providers are actively upgrading their product lines to cope with market fluctuations. Both UPS and DHL are increasing investments in medical and high-end dedicated lines—areas that are relatively less sensitive to tariffs and economic cycle fluctuations.

For example, DHL Express has launched next-day delivery medical dedicated services between Brazil and the US; UPS has continuously acquired medical logistics companies in the past two years, further strengthening its cold chain and medical delivery capabilities.

These strategic investments indicate that the express giants are accelerating their shift to value-intensive, time-sensitive freight segments, building a stable income buffer in markets where capacity is declining in other routes.

Response Strategies

For both shippers and carriers, the series of changes at the end of April not only brought short-term shocks but also fueled the drive for long-term transformation:

Rising Uncertainty: Frequent fluctuations in tariff policies, the potential for sudden capacity reductions, and the continuous reshaping of trade routes have created ongoing challenges.

Initial Response Strategies Emerging: From expanding bonded warehouses and mergers to the implementation of nearshoring projects, businesses have already begun proactively planning for the future.

Shipper Action Guidelines: Lock in diversified supply sources from Mexico, Southeast Asia, and other regions; flexibly utilize free trade zone policies and tariff strategies to maintain high procurement and transportation flexibility.

Carrier Winning Formula: Cost optimization and flexible scheduling are key to success—whether it’s adjusting truck routes, replenishing empty containers with rail, or developing intermodal solutions. Those who can quickly adjust and control costs will stand out in the fierce competition.

As we approach the end of April 2025, North American trade stands at a pivotal point. Whether this tariff battle evolves into a long-term new normal or remains part of negotiation tactics, the entire logistics industry is prepared to face the upcoming summer filled with challenges and opportunities.

Wakool Transport’s Solutions

In response to the U.S. government’s new policies on imposing high tariffs on Chinese and Hong Kong products and eliminating the de minimis exemption for small packages, Wakool Transport offers professional logistics services to help businesses navigate these challenges. As a company specializing in comprehensive logistics solutions, Wakool Transport assists clients in optimizing their supply chain management and mitigating the impact of the new tariff policies.

Accurate Customs and Risk Management

Wakool Transport ensures that all documentation is accurate and compliant with the latest regulatory requirements through our professional customs services. Additionally, we employ real-time policy tracking and risk assessment systems to update policy changes promptly, helping clients anticipate and prepare for necessary actions to avoid underreporting or missed declarations.

Intermodal and Key Node Warehousing Solutions

To address issues with route instability and port congestion, Wakool Transport provides flexible intermodal solutions that combine sea, rail, and road transport. Through strategic partnerships with major North American rail operators, we enhance transportation efficiency and reduce costs. At key nodes such as Los Angeles, Long Beach, and Houston, we offer warehousing and yard services to help clients manage inventory storage, reduce congestion, and minimize delays.

Flexible Pricing and Contract Guarantees

Wakool Transport offers dual-track pricing with Spot Rates based on demand and guaranteed minimum capacity contracts: clients can enjoy immediate access to the lowest market rates or secure a pricing floor and seasonal discounts with a volume-based contract. Priority is given during peak seasons.

End-to-End Cost Visualization

We provide comprehensive visibility into the costs associated with tariffs, warehousing, detention, and secondary scheduling, helping you make optimal decisions from a “total chain cost” perspective to truly reduce costs and enhance efficiency.

Full-Supply Chain Service and Digital Monitoring

Wakool Transport has optimized the supply chain management from international markets to the U.S., particularly for shipments from China to the U.S. We have an office in China dedicated to managing and executing the transportation of goods from inland China to the U.S., including container pickup, warehousing, and final delivery, ensuring each step is efficient and smooth. We also offer an advanced digital monitoring platform that allows clients to track cargo status, inventory levels, and tariff compliance in real-time, enabling full-process visibility and improved decision-making efficiency.

Through these comprehensive measures, Wakool Transport helps clients reduce the uncertainty caused by policy changes, optimize cost efficiency, and improve operational flexibility, ensuring the stability and continuity of their supply chains in a constantly changing market environment.