Morgan Stanley: More Supply Chain Shifts With Tariffs

Morgan Stanley has released a research note titled "More Supply Chain Shifts With Tariffs," signaling the investment bank's view that supply chain realignment driven by US trade policy is unfinished business. The title, picked up via standard news syndication, implies a continuation thesis: firms are still moving sourcing, inventory and routing in response to tariff changes that began in 2018 and have layered on since, with no settled endpoint in sight.

The available excerpt does not include Morgan Stanley's specific projections. Only the headline and byline are in the public domain at the time of writing, a caveat worth flagging before any number is attributed to the note.

What does "more" actually mean?

Each round of US tariff escalation has produced a measurable shift in cargo flows. Container bookings from China to the US West Coast had already fallen roughly 20% on key trade lanes by 2023 compared with 2018 peaks, according to US Census trade data. Vietnam, Mexico and India absorbed a meaningful share of redirected sourcing, with Vietnam's exports to the US rising approximately 75% between 2018 and 2023 on the same dataset.

The implicit Morgan Stanley argument, based purely on the "more" framing, is that another shift is coming, and operators should treat current lane configurations as provisional rather than permanent.

What the note does not yet say

Sell-side research notes typically carry a target price or theme call tied to a specific trade. Morgan Stanley's published deck on this topic is not in the available excerpt. Read with caution: any commentary cited as "Morgan Stanley says X" until the full note is published risks attributing views the firm has not stated.

What should shippers and forwarders watch?

Three signals will confirm or refute the "more" thesis in the coming quarters.

• US Census import-value data, released monthly, for country-of-origin shifts on tariff-sensitive HS codes (9403 furniture, 8517 electronics, 6109 knit apparel among the most tracked)
• Container booking indicators: the Shanghai Containerized Freight Index (SCFI) and Freightos Baltic Index (FBX) historically moved 15% to 25% during prior escalation episodes, with spot rates on the FBX transpacific lane running between $1,300 and $4,800 per FEU over the last 18 months
• Ocean carrier service announcements: MSC, Maersk, CMA CGM, Hapag-Lloyd and ONE — together roughly 65% of deployed transpacific capacity — adjust loop designs first, with blank sailings often the leading indicator

LA/Long Beach, which handled approximately 9.1 million TEU in 2023, sees the first operational wobble when tariff-driven trade flow shifts land, both on the marine side and on drayage.

Modal implications worth quantifying

Air cargo typically absorbs the highest-value, time-sensitive portion of any sourcing shift. The US-China air cargo lane has historically run between 450,000 and 500,000 tonnes annually, per widely cited Boeing World Air Cargo Forecast framings; reductions of 10% to 15% in any single quarter push freight onto transpacific air services at premium rates, with FedEx, UPS and Cathay Cargo competing for the share of a global air cargo market estimated near $80 billion a year.

Trucking and warehousing carry the second-order effect. Inventory pre-positioning — buffers that built up during 2021-2022 supply shocks and unwound through 2024 — restarts when shippers expect sustained tariff exposure. The risk for carriers and 3PLs is asymmetric: a 5% lane swing is operationally meaningful but commercially small for the largest forwarders, and disproportionately painful for mid-tier brokers running tight balance sheets.

Morgan Stanley's "more" is a directional call, not a forecast with disclosed numbers. The note's value, on the available evidence, is the reminder: trade flows built on tariff assumptions reset when tariff assumptions change, and freight contracts, lane designs and inventory buffers constructed for the last configuration must be re-tested against the next.