The end of the year is typically a quiet period for US ocean shipping as retailers wrap up their holiday stocking. But the close of 2025 — and the start of 2026 — is shaping up to be more than just subdued. The industry is facing a deepening downturn with little sign of a rebound.

Lower inbound volumes are rippling across the transport sector, from drayage companies to ocean carriers struggling to keep container spot rates from slipping further. Importers have spent more than a year pulling shipments forward to hedge against potential tariff increases, and with US consumers growing more cautious, retailers are restocking only what they must.

Retailers now expect double-digit declines in November and December imports. Monthly volumes are projected to stay below 2 million TEUs through March, according to the latest Global Port Tracker (GPT) from Hackett Associates and the National Retail Federation. Months of frontloading have intensified the late-year slowdown, and shaky consumer sentiment combined with shifting US tariff policy is pushing retailers to keep inventories tight.

“These conditions make market forecasting highly uncertain,” said Ben Hackett, founder of Hackett Associates. The firm expects a small drop in imports for 2025 compared with 2024, followed by a sharper decline in early 2026.

Moody’s Ratings forecasts US container volumes to be flat to down 2% in 2026 after ending 2025 roughly unchanged to 1% below last year.

Holiday sales are expected to rise 3.2% this year — well below the 4.8% gain in 2024, according to S&P Global — as consumers contend with higher prices and slowing job growth. Unemployment ticked up from 4.3% in August to 4.4% in September. Still, the broader economy is expanding, with the US Manufacturing Purchasing Managers’ Index edging up in October.

Michael Zdinak of S&P Global noted that slower retail sales growth underscores consumers’ fragile footing: they continue to spend, but “each time their steps have been more measured.”

Inflation remained moderate in September with CPI rising 0.3% for the month and 3% year over year. A 43-day federal government shutdown delayed October’s CPI release and contributed to falling consumer sentiment, which hit its lowest level since May.

Retailers are adjusting. Home Depot lowered its 2025 outlook amid concerns about affordability and the job market. “Affordability is a word that’s being used a lot,” CEO Ted Decker told analysts.

Inventory levels reflect this caution. Retailers’ inventory-to-sales ratios have stayed between 1.28 and 1.32, indicating lean stock levels despite earlier frontloading. GPT projects Q1 2026 imports to drop 12.2% year over year to 5.62 million TEUs.

US imports peaked for the year in July at 2.6 million TEUs before sliding 4.6% year over year from August to October, according to PIERS. The sharpest declines came from Asia: shipments from the region, including India, fell 5.6% during the period. Imports from China — facing tariff rates of about 47% — plunged 16.7%.

The slump has dragged “bullet rates” for Asia–US West Coast sailings below $1,400 per FEU. Depending on the index, West Coast spot rates are down 30–60% from last year, often falling below the roughly $1,600 per-FEU average long-term contract rate, per Xeneta.

Carriers’ repeated attempts to raise rates through general rate increases have provided only brief relief. “Prices, again, are just in a bit of a freefall,” said Sanjay Tejwani, CEO of 365 Logistics. Carriers have blanked sailings and shifted vessels to other trades, but “it’s too little, too late.”

Even so, shippers aren’t rushing to renegotiate service contracts that generally renew in April. Maersk CEO Vincent Clerc said customers are still honoring allocated volumes, and forwarders are blending spot and contract pricing to find middle-ground solutions.

Despite weak demand, carriers haven’t withdrawn services and are blanking capacity at normal seasonal levels. In fact, maritime intelligence firm eeSea reports that carriers plan to add more Asia–US capacity in December.

Source: joc.com