*

Tariff-related procedural delays may disrupt logistics

*

Cargo movement saw a slight pick-up in December and

January

*

Red Sea avoidance expected to continue for a while

(Updates April 1 story with details in paragraph 9, TV images

are available)

By Yuka Obayashi

TOKYO, April 1 (Reuters) - Nippon Yusen (NYK),

Japan's largest shipping line, is concerned that U.S. President

Donald Trump's tariffs could push up the cost of automobiles and

daily goods, denting consumer demand and slowing cargo flows,

its president said.

"The tariffs are not directly borne by consumers, but the

burden ultimately falls on them, which in turn reduces the

actual flow of goods. That's our biggest concern," President

Takaya Soga told Reuters in an interview on Monday.

Trump last week unveiled plans to impose a 25% tariff on

automobile imports, a move expected to hit Japan's export-driven

economy. He has also vowed to announce reciprocal tariffs

targeting all trading partners on Wednesday.

"Tariffs could have a considerable impact on the economy,"

Soga said, adding that the extent of the impact on shipping and

logistics companies will depend on actual cargo movements.

However, Soga sees potential benefits from the trade war.

As seen during the COVID-19 pandemic, even if cargo volumes

decline, tariff-related procedural delays could disrupt

logistics, tighten ship demand and lift freight rates, he said.

And if China shifts to sourcing raw materials from outside

the U.S., NYK could find business opportunities.

A rush for general consumer goods drove up cargo movement

in December until just before the Chinese New Year in

anticipation of U.S. tariffs, but there has been no major shift

in material flows since they took effect, Soga said.

The United States is also planning to charge fees for

docking at U.S. ports on any ship that is part of a fleet that

includes Chinese- built or Chinese-flagged vessels and will push

allies to do similar or face retaliation.

Of the roughly 800 vessels owned or operated by NYK, less

than 10% are China-built, according to the company.

"The U.S. government will carefully examine the policy,

including whether it will be implemented, so we cannot say now

that we will stop ordering vessels from China," he said.

With ongoing geopolitical risks in the Middle East, Soga

expects Red Sea avoidance to continue for a while. Disruption in

the Red Sea due to attacks by Yemen's Houthi militants absorbed

extra capacity last year, as many ships took a longer route

around Southern Africa.

While container vessel congestion in the Panama Canal has

largely been resolved, NYK is urging the Panama Canal Authority

to reinstate Tier 1 priority for liquefied natural gas (LNG)

tanker traffic, Soga said.

Regarding the investment plans in vessels involved in

offshore wind power projects, Soga said the company's plans in

Japan may be delayed due to slower-than-expected market

development, but overseas investments will proceed sooner.