Tariffs and Their Effects on the Freight Industry
Nothing in the global economy is more of a double-edged sword than tariffs. While initially a necessary action for countries to encourage domestic economic growth, it has become a political tool these last few years for governments to use against one another. The United States has been a particular culprit, using them in part to enforce international policies and to encourage manufacturers to produce in America only.
The effects of tariffs on both domestic and international economies can persist for years. Tariffs impact suppliers, manufacturers, and distributors, as many of them depend on overseas supplies. But what precisely are the consequences of tariffs for the logistics industry?
Shifts in Trade Routes
When tariffs are placed on imports from a specific country, businesses often reevaluate their supply chains and shift sourcing to alternative regions with lower or no tariff impact. This may involve finding new suppliers, altering production schedules, or rerouting shipments entirely to avoid added costs. As a result, we see significant changes in freight lanes, with increased activity at some ports and reduced volume at others—especially those heavily tied to the affected country.
These shifts also influence carrier selection and route planning. Ports that were once primary entry points may see a decline, while others experience unexpected surges in volume. In turn, demand for alternative carriers, inland drayage providers, and new transshipment routes rises as businesses work to maintain efficiency and minimize delays. This type of supply chain realignment can also create short-term congestion and long-term changes in infrastructure investment across the freight ecosystem.
Increased Costs
Tariffs increase the landed cost of goods—the total cost of getting a product to its final destination, including duties, transportation, and handling fees. When tariffs drive up this cost, shippers are forced to make tough financial decisions. Some may choose to absorb the added expense, which can squeeze profit margins, especially for small or mid-sized businesses. Others may pass the cost along to customers, potentially reducing demand for the final product. In more extreme cases, companies may decide to reduce shipment volumes altogether, sourcing goods domestically or delaying imports until tariff conditions improve.
These decisions ripple through the freight industry, often resulting in fluctuating demand for shipping services. Industries heavily reliant on global imports—such as electronics, automotive, and agriculture—may scale back their freight activity, leading to fewer truckloads, lower LTL volume, and increased competition among carriers for available freight. The unpredictability caused by shifting tariff policies adds a layer of complexity to supply chain planning and can make long-term freight forecasting more difficult for both shippers and logistics providers.
Surge and Drop Cycles
When tariff deadlines approach, businesses often accelerate their import schedules in an effort to avoid higher duties. We saw an example of this in early April when Apple flew four planes full of phones into the U.S. in preparation for the tariffs. This “beat-the-deadline” strategy creates a surge in freight volume as companies rush to bring in goods before tariffs take effect. Ports, carriers, and customs brokers may experience temporary congestion as they handle a sudden influx of shipments. Warehouses and distribution centers can also feel the pressure, as importers scramble to store the incoming inventory.
However, once the deadline passes and the tariffs are in place, the urgency fades—and shipment volumes often drop off significantly. This creates volatile demand for freight services, where capacity is strained one week and underutilized the next. Such cycles can make it challenging for carriers to plan routes, manage staffing, and optimize equipment usage. For freight brokers and logistics providers, it means navigating unpredictable shipment patterns, adjusting pricing strategies, and advising clients through rapidly shifting timelines.
Inventory Hoarding and Storage Costs
This sudden influx of goods may also put added pressure on warehouses, cross-docks, and local distribution centers, which may already be operating near capacity. Space becomes scarce, labor is stretched thin, and operations may slow down—leading to delays in freight timing and reduced flexibility in managing new shipments.
Increased inventory buildup also raises drayage demand, as more containers need to be quickly moved from ports to storage facilities. This surge can lead to higher drayage rates and longer wait times, particularly in congested port regions. Additionally, the shift in shipping behavior often impacts how freight is moved inland: rather than regular smaller LTL shipments, companies may pivot to larger, consolidated FTL loads to move bulk inventory efficiently. This strategic change alters capacity planning for carriers and can disrupt typical shipping cycles for both service providers and end customers.
Compliance and Documentation Complexity
Tariff changes often come with updated paperwork requirements, revised duty rates, and new classification codes, all of which must be accurately applied to each shipment. These adjustments can create a significant administrative burden on logistics and compliance teams, who must stay up-to-date with rapidly changing regulations across multiple countries or regions. Failure to correctly document goods—whether through incorrect HTS codes, outdated certificates, or missing declarations—can lead to customs holds, delays, fines, or even rejected shipments.
To avoid these costly disruptions, companies must invest time and resources into training staff, updating systems, and coordinating closely with customs brokers and freight partners. In fast-moving industries or during trade disputes, these changes can happen with little notice, making proactive compliance even more critical. For logistics professionals, tariff adjustments add another layer of complexity to an already intricate global supply chain.
In today’s interconnected global economy, tariffs are more than just political tools—they’re powerful market disruptors that ripple through every corner of the freight industry. From shifting trade routes and fluctuating shipment volumes to increased compliance demands and warehousing strain, their impact is far-reaching and often unpredictable.
For shippers, carriers, and logistics professionals alike, staying agile, informed, and proactive is essential. As trade policies continue to evolve, those best prepared to adapt will not only weather the changes—but find new opportunities in the midst of disruption.
