SEA, IYT Among Shipping ETFs Hit by Port Slowdowns

Port traffic at major U.S. gateways is plummeting as President Donald Trump's tariffs reshape global trade patterns, with ripple effects clearly visible in ETF performance across the shipping and logistics sectors.

Investors tracking the shipping industry through ETFs face a dramatically changing landscape as new tariffs upend established trade patterns, creating both risks and opportunities depending on exposure to sea versus air cargo and geographic focus.

According to etf.com data, marine shipping-focused ETFs are weathering the storm better than broader transportation funds with mixed exposure. The U.S. Global Sea to Sky Cargo ETF (SEA) posted a decline of 1.6% over the past month and 5.2% year to date, while attracting $1.4 million in investor inflows over the past year.

In contrast, the iShares U.S. Transportation ETF (IYT), with air freight exposure including a 6.8% position in United Parcel Service, Inc. (UPS), has suffered losses of 5.2% in the past month and 10.4% year to date. The ProShares Supply Chain Logistics ETF (SUPL) shows a similar pattern with declines of 5.3% over the past month and 8.5% year to date.

Logistics Sector Under Pressure

The divergence comes as UPS announced plans to cut 20,000 jobs this year and close 73 buildings in the next two months, according to reporting from The Washington Post. The company's earnings release indicates these moves are expected to save $3.5 billion as the company reduces its business with Amazon.com, Inc. (AMZN) amid wider economic uncertainty.

Port executives are reporting dramatic changes in shipping volumes. At the Port of Los Angeles, a key gateway for Asian imports, arrivals are expected to drop by 35% in the coming weeks, according to Los Angeles Times coverage. These shipping declines directly impact the outlook for holdings in funds like SEA, which dedicates 70% of its portfolio to sea cargo companies.

According to etf.com data, SEA's top holdings include major shipping firms like Hoegh Autoliners ASA (5.8%), Yang Ming Marine Transport Corp. (5%) and Evergreen Marine Corp. (Taiwan) Ltd. (4.8%)—all companies directly exposed to transpacific shipping volumes.

SUPL takes a different approach with its market-cap-weighted index of companies involved in global supply chain logistics. Its top holdings include Deutsche Post AG (5.8%), Amadeus IT Group SA (5.5%) and Canadian Pacific Kansas City Limited (5%). This broader exposure to logistics software and rail freight provides some diversification but hasn't insulated the fund from recent market pressures.

Implications for Investors

For ETF investors, portfolio composition appears to be driving performance differences. The SonicShares Global Shipping ETF (BOAT), focused exclusively on water transportation with holdings like Orient Overseas International Limited (5.9%) and Mitsui O.S.K. Lines Ltd. (5.9%), has declined just 0.5% over the past month and 3.8% year to date, according to etf.com data.

Transportation ETF Performance Comparison

Source: FactSet

The Washington Post reports that UPS CEO Carol Tomé called the current tariff situation uncertain, saying "many of UPS's small- and medium-sized business customers source from China," creating a challenging environment that could persist through much of 2025.

According to The Spokesman-Review, Seattle-area shipping companies have already started to see cancellations of scheduled sailings. One baby-clothes retailer paused a $200,000 shipment after realizing the 145% tariff would add roughly $300,000 to the cost. These shipping disruptions will likely continue affecting the earnings of companies held by transportation ETFs, potentially widening performance gaps between funds with different sector exposures.