Chart of the Week:  Inbound Ocean TEUs Volume Index – USA SONAR: IOTI.USA

Bookings of containers bound for the U.S. (IOTI) have fallen 20% over the past six weeks, signaling that importers may have fully recovered from early-year inventory concerns. After plunging in May, imports surged to an early peak when the president paused the 145% tariff on Chinese goods. Now, companies appear to be trying to avoid another inventory hangover as questions persist about the health of the consumer. What does this mean for transportation markets for the rest of the year?

Upstream, one of the biggest shifts has been the continued pullback from China. Import bookings from China to the U.S. are down 25% year-over-year, while Vietnam is one of the few countries showing annual growth as of last week.

China has offset much of the decline, however, as total export bookings remain nearly flat compared to 2024, according to SONAR data. The takeaway is that global trade flows are rapidly adjusting to Trump’s ongoing negotiations, forcing carriers to rebalance trade lanes. This could eventually affect service levels as schedules shift and blank sailings increase.

The slowdown in imports has not yet fully reached the domestic market, since bookings data represents containers still two to four weeks away from arriving at U.S. ports. For example, shipments from China to Los Angeles currently take about 16–17 days, based on published transit times.

Intermodal demand remains the most directly tied to containerized imports. Shippers have leaned more on rail over the past year as longer lead times and pre-emptive ordering provide extra flexibility. With warehousing costs rising quickly, many shippers are using containers as “moving storage” to offset inventory holding costs.

Loaded container volumes—both domestic and international—are currently in line with last year, while truckload tender volumes are down about 15%. If import volumes continue to erode, intermodal demand, especially for international containers, could weaken further in the months ahead. The truckload market has been less affected, as shippers have relied more on shorter hauls where rail offers limited cost savings or utility.

Supply chains remain reactive, balancing upstream procurement with uncertain downstream demand. The result has been a hybrid strategy: maintaining a small buffer of inventory while avoiding the kind of glut seen in early 2022.

The Logistics Managers’ Index (LMI) shows inventory levels expanding more quickly this year compared to the first seven months of 2024. Some of this growth is defensive ordering, but some likely reflects weaker demand. Import bookings data reinforces the idea that companies are facing softer demand overall.