Expected tariffs may impact retail freight
- President-elect Trump has indicated that his supply-chain-related policy agenda will be centered around “de-risking” from China and other foreign manufacturing centers. This approach would lead to higher tariffs for all imported goods and potentially significantly higher tariffs from China. This, in turn, could lead to shippers seeking to “de-risk” from China and pursue alternatives in routing based on increased production in nearshoring, friend-shoring, or ally-shoring origins. The earliest that new tariffs could be in effect is late February or early March.
- With continued port labor uncertainty and the potential for increased tariffs in Q1, shippers should anticipate a strategic pull-forward of inventory out of Asia, which would impact both international and certain domestic freight markets.
- On the U.S. West Coast, increased port volumes have been stronger than expected due in part to retail season and a shift from East and Gulf Coast ports, which is a trend likely to continue per the previous bullet. Many shippers plan to utilize the West Coast ports further until a resolution to the labor dispute at the other ports is reached. Typical seasonality is expected as we close out the year and into next.
- Airlines are limiting passenger flights from Asia to the United States and Europe, while cargo freighters are increasingly busy with ecommerce and project cargo. Additionally, an aircraft manufacturer’s strike is creating capacity constraints expected to drive up rates in November 2024 amid rising demand.
This helped me