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The pause in the U.S.-China trade war and associated demand booms have caused a scramble amongst shipping lines to inject capacity swiftly, according to recent Sea-Intelligence research. On the Asia-North America west coast (NAWC) trade, it is seeing capacity growth in excess of 30% year on year in five of the next 11 weeks.
Looking at capacity growth across June and July, then in June, the lines are increasing capacity 12.8% compared to before the tariff pause, and in July, the capacity injection is increasing to 16.5% compared to the pre-pause situation. Capacity has also ramped up sharply compared to just a week ago, with this injection of capacity equaling 397,000 TEUs across the two months.
What is potentially more important is the year-on-year growth. In June and July, shipping lines are planning to offer approximately 18% more capacity. It is of course an open question whether the tariff-induced volume surge will match this capacity injection. However, if it does, it can create a significant issue in the ports of Los Angeles and Long Beach.
If is quite simplistically assumed that the 18% capacity injection matches the volume surge going into the ports of Los Angeles and Long Beach, then the projected laden import container handling at the ports in June and July. It also compares to the maximum monthly volume handled in 2024,as well as the largest monthly volume seen during the pandemic disruptions in 2021.
