Asset management firm Apollo Global Management forecasts trucking demand stopping in about a month resulting in empty shelves and a recession this summer as President Donald Trump's trade war policies are bringing about changes in global shipping not seen since the coronavirus pandemic, with ocean carriers readying for significantly reduced demand, according to analysts and observers.
Specifically in focus: U.S. trade with China, amid the back and forth over tariffs and possible deals. The uncertainty has led to a decrease in shipping volumes from China to North America, with cancellations currently at 50%, according to global logistics firm Flexport.
Apollo Global Management Chief Economist Torsten Slok on Sunday released a report outlining the timeline for Trump's tariffs to result in empty shelves, layoffs in the trucking and retail sector and a recession this summer.
Trump announced his "liberation day" tariffs on April 2 and it takes about 20-40 days for container ships to sail to the U.S. from China, according to Apollo. Slok estimates that container ships coming to U.S. ports could come to a stop by mid May.
It then takes about 1-10 days of transit time for trucking/rail to bring goods from the ports to cities. Apollo Global Management predicts that my late May domestic freight demand will "come to a halt" and that there will be "empty shelves" with companies responding "to lower sales."
By early June, Slok forecasts there will be layoffs in the the domestic freight and retail industries with a recession hitting the U.S. this summer.
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The Ports As Of Last Week
William Blair macro analyst Richard de Chazal told IBD over the weekend that activity in the major ports is slowing sharply after a pre-tariff day ramp up in activity.
"So some normalization should be expected," he said. "What happens next will depend on what President Trump decides to do after the 90-day pause. Unfortunately we do not know."
Flexport reports that the short-term outlook for shipment-volume growth from Southeast Asia to North America "remains muted." Volumes in April remained consistent from the beginning of the year through March, prior to the Trump tariff announcements.
However, this could change soon.
"Ports are unloading above-average container arrivals in the past couple of weeks that were stocking up ahead of the tariffs," Schwab Chief Global Investment Strategist Jeffrey Kleintop told IBD last week, referring to traffic data at the Los Angeles and Long Beach ports, the major U.S. entries for shipments from Asia.
"But for booking in the weeks and months ahead, we are seeing falling demand and high cancellation rates rivaling those of the pandemic," Kleintop added.
Trump Trade War: Shippers Ready For Tariffs
Ocean carriers are already withdrawing capacity from the Pacific Ocean route between Asia and North America. The withdrawals are occurring "at faster rates" than during the coronavirus pandemic in anticipation of reduced demand following new U.S. tariffs on goods from China, according to Flexport.
Shipping operators are doing this by sending smaller vessels, canceling or skipping a scheduled port of call in the middle of sailing and suspending entire shipping routes, the global logistics firm reports.
Cargo ships sailing from Hong Kong to Los Angeles take on average around two-to-three weeks, between 25 and 30 days to Houston and about 40 days to reach New York City, according to sector analysis.
The National Retail Federation, whose members include Walmart, Target and others, forecast earlier this month that U.S. import cargo volume will fall at least 20% year over year in the second half of 2025 as U.S. companies pause orders from China.
On Thursday, maritime consultancy firm Drewry announced it expects global container port volume to decline 1% due to Trump's trade war policies. London-based Drewry reported this was only the third time since it began collecting container shipping data in 1979 that shipping demand has dropped. Container volume fell 8.4% during the global financial crisis in 2009 and just below 1% in 2020 at the start of the coronavirus pandemic.
Reuters reported Thursday that Drewry believes that even if two thirds of Trump's current tariffs remain in place, U.S. imports from China could fall by 40%.
"It stands to reason that more discretionary and high-ticket items could suffer more from a consumer pullback than food commodities," Kleintop said.
Shipping Stocks And Retailers
Big retailers that rely on China-made goods — like Amazon, Walmart and Target — are set to feel an impact from Trump's trade war, as well as the slowdown in shipping.
Amazon reports first-quarter earnings on Thursday with Walmart's Q1 financials coming on May 15. Target follows with first-quarter earnings and revenue on May 21. Amazon stock is down around 1.4% in April while Target stock has dropped 7.7%. Walmart shares have advanced more than 8%.
Container liners and logistics companies ZIM Integrated Shipping and XPO Logistics are down 0.9% and 9.4%, respectively during April's stock market action.
The 37 stocks in the IBD-tracked Transportation-Ship industry group have collectively declined 17% during 2025. That puts the sector at a weak No. 177 out of 197 ranked industries, with 1 being the best performer and 197 the worst.
Domestic freight company Old Dominion Freight Line is down 10% in April while peer ArcBest has declined 16.3% during stock market action in April.
Old Dominion Freight Line executives on their Wednesday Q1 earnings call said that their revenue per day for April will decrease about 6% compared to a year ago. The executive team added that a "full recovery in our business trends might take additional time."
Meanwhile, trucking firm J.B. Hunt is down 11.5% this month while Schneider has dropped about 4%.
Please follow Kit Norton on X @KitNorton for more coverage.
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