Expected tariffs may affect retail freight
- President-elect Trump has indicated that his supply-chain-related policy agenda will be centred around “de-risking” from China and other foreign manufacturing centres. 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 routeing 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 labour uncertainty and the potential for increased tariffs in Q1, shippers should anticipate a strategic pull-forward of inventory out of Asia, which would affect 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 utilise the West Coast ports further until a resolution to the labour 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.
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