Tariffs Hit Key California Ports Serving Amazon, FedEx and UPS

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A new round of tariffs between the US and China is sending ripples through California’s key freight corridors, especially at the Ports of Los Angeles and Long Beach. These two hubs, the busiest container gateways in the country, are central to the operations of Amazon, FedEx and UPS. Each depends on a consistent inflow of Chinese-manufactured goods to meet domestic delivery timelines.

Tariff impacts cascade through California’s major ports

Early indicators from shipping lines and port authorities suggest that the disruption is already significant. Hapag-Lloyd, one of the largest container carriers, reported that nearly 30 percent of shipments scheduled from China to the US were canceled in mid-April, a direct response to the added cost burden.

At the Port of Los Angeles, a 4.7 percent increase in imports was recorded in March as companies brought in goods early to avoid higher fees. Yet this short-term surge obscures a larger concern: volumes are expected to fall sharply in the coming months.

FedEx and UPS are particularly vulnerable to these shifts. Their supply chains rely on integrating ocean freight with ground and air networks. When cargo is delayed at port terminals, the effects ripple outward, slowing down last-mile delivery and fulfillment operations across the country.

E-commerce platforms and air cargo respond to the squeeze

Another consequence of the tariff changes is the elimination of the “de minimis” exemption for goods under $800 coming from China and Hong Kong. This rule had allowed platforms like Shein and Temu to avoid duties on most small-package consumer shipments. Without it, these companies now face steeper costs, and many are reducing US-bound orders.

Cathay Pacific and other Asia-based carriers have already reported a drop in air cargo bookings destined for the US. With reduced demand for air freight, Amazon and similar retailers are adjusting their logistics plans. Some have begun rerouting freight through Gulf Coast and East Coast ports to avoid congestion and tariffs in California. UPS is modifying its routing systems to reduce reliance on affected corridors.

A test of resilience for supply chains and policy durability

While frontloading and rerouting offer some relief, these are short-term tactics. Treasury Secretary Scott Bessent recently expressed concern that the trade conflict is unsustainable. Shipping markets, which depend on stable and predictable flows, cannot function properly amid such volatility.

The risk extends beyond ports. California’s broader economy is also at risk, as it depends heavily on trade-related jobs and activity. Warehouse operators, drayage trucking companies and third-party logistics firms are all evaluating how to absorb the added costs or pass them downstream.

Manufacturers may also accelerate diversification plans. For years, companies have been moving parts of their supply chains out of China. The latest tariffs may speed up that shift, creating new regional trade dynamics in Southeast Asia and Latin America.

For logistics firms and policymakers, this is a moment that calls for careful recalibration. Amazon, FedEx and UPS continue to depend on California’s ports, but those routes are becoming less predictable. In the coming months, they will need to weigh cost increases against delivery speed and customer expectations.

With the peak summer shipping season ahead, the industry is watching closely. Whether this is a short-lived policy phase or the start of a deeper global trade realignment remains uncertain. What is clear is that the stakes are high, and adjustments will be necessary across the logistics ecosystem.

Sources

• Reuters
• Bloomberg