MARKET BRIEF | September 2025
U.S. Manufacturers Stockpiling Ahead of Tariff-Driven Cost Increases
U.S. manufacturers are increasingly stockpiling raw materials and components in anticipation of higher costs from new tariffs, driving supply chain stress indicators to their highest levels in more than two years. The buildup reflects growing concern that import restrictions will squeeze margins and disrupt production if firms are caught short on critical inputs. While this strategy offers short-term protection against price volatility, it also creates risks such as higher carrying costs, cash flow strain, and potential overstock if demand slows. The trend highlights how tariff uncertainty is reshaping procurement strategies and adding new layers of complexity to supply chain planning.
Chinese-Linked Tonnage About to Be Hit with U.S. Port Fees
HSBC estimates that COSCO and OOCL will incur a combined cost of $2.1 billion in 2026 due to impending U.S. port fees targeting Chinese‐owned, operated, or built vessels. The new fees begin October 14, starting at $50 per net ton for Chinese-owned/operated vessels, rising to $140/ton by 2028; non-Chinese operators using Chinese-built vessels face lower rates (starting ~$18/ton or $120 per container). For COSCO, that burden equates to roughly 5.3% of expected 2026 revenue, while OOCL’s hit is estimated at 7.1%. To mitigate impact, the lines may lean on alliance partners deploying non-Chinese-built ships, reroute cargo via Canada, Mexico or Caribbean hubs, or use older non-Chinese built tonnage.
Blank Sailings & Capacity Adjustments as Carriers React to Weaker Demand
Carriers are increasingly implementing blank sailings and capacity adjustments as demand softens across key trade lanes, notably transpacific and Asia–Europe. (“Blank sailings” refers to the intentional cancellation of a scheduled ship voyage or a planned skipped port call by a shipping carrier.) In the past week, cancellations for scheduled sailings shot up ~60%, jumping from 49 to 78 blanked voyages. Although only ~12% of total sailings during that period are slated for cancellation, a large share affects Transpacific Eastbound and Asia-Europe/Med routes. Spot rates are under pressure: Asia-Europe/Med spot rates dropped ~11%, while the Asia-U.S. East/West Coast routes have mixed results due to recent rate hikes. Carriers are using tools like schedule management, selective deployment, and blank sailings to try to protect rate levels and profitability in the face of overcapacity and unpredictable demand.
U.S. Producer Prices Unexpectedly Fell in August
In August 2025, U.S. producer prices unexpectedly fell by 0.1% from July, cooling off after a 0.7% surge the previous month. The drop was driven by a 0.2% decline in service prices, particularly trade-services margins, while goods saw a modest 0.1% increase. On an annual basis, overall producer prices rose 2.6%, and “core” prices (excluding food, energy, and trade services) advanced 2.8%. The data suggest many businesses are absorbing higher costs — such as from tariffs — rather than passing them fully on, and hint at easing inflation pressures.
