Global Shipping Lines Cancel Sailings at Unprecedented Pace Amid Tariff Turmoil

Global supply chains are facing significant disruption as liner carriers cancel sailings at a rate not seen since the peak of the COVID-19 pandemic, driven by tariff-induced volatility and weak U.S. demand.

Current analysis reveals that carriers' operating profit margins on several major routes have fallen below the break-even point. Despite this, shipping companies continue to prioritise market share over profitability.

Projections for October 2025 indicate an unprecedented level of cancellations on key trade lanes, with 67 planned sailings cancelled from China to the U.S. and 71 from the U.S. to China. These capacity reductions surpass previous records set during the pandemic, underscoring the severe impact on maritime trade following the Trump administration's recent tariff measures.

Bart De Muynck, Chief Strategy Officer at supply chain analysis firm Better Supply Chains, commented on the strategic shift. 'The intensity of carrier cancellations is unprecedented since the early days of the pandemic,' he stated. 'This strategy is more about stabilising freight rates in a tariff-distorted market than responding to a crisis.'

The 'Liberation Day' tariffs, which took effect in early August and have been described as 'the broadest tariff action in modern U.S. history', have created an environment of profound uncertainty for global trade. The most affected trade routes include the U.S. West Coast to Southeast Asia, where cancellations surged 75% year-over-year. Cancellations on the China to U.S. West Coast route increased by 46.5%, while those from Southeast Asia to the U.S. West Coast rose by 40.7%.

Trade data reveals substantial shifts since Donald Trump took office, with U.S. imports from China declining for five consecutive months and exports to China falling for nine straight months. Year-to-date figures show imports have dropped 27% year-on-year, while exports have plummeted 42%.

Facing this new reality, carriers are employing capacity management as their primary tool. Tariff-induced volatility has led to reduced sailings and weakened demand, making service cancellations the preferred method to support rates. Notably, despite these significant adjustments, sourcing patterns have remained surprisingly stable, with most carriers adjusting shipment timing rather than substantially shifting production away from China.

Consulting firm Linerlytica reported this week that shipping companies face considerable challenges in their efforts to restore rates. 'Market activity slowed due to China's Golden Week holiday, keeping pressure on Far East rates,' the consultancy noted. 'While carriers are pushing for a rate hike on October 15 to reverse recent steep declines, the resumption of most regular services after Golden Week cancellations has provided little support for rate increases.'

Investment bank Jefferies recently issued a caution that weak spot rates-which have fallen below leading carriers' breakeven points for the first time since late 2023-could threaten 2026 contract negotiations.

As the industry navigates these complex challenges, some conclude that tariffs' impact on cargo transit times and reliability outweighs their effect on supply chain geographic allocation. However, the outlook for 2026 remains heavily contingent on future tariff decisions and ongoing trade negotiations between major trading partners.