Following the Trump administration’s ban, duty-free imports are no longer possible, and low-value shippers must reevaluate logistical costs or rethink their entire supply chain. This could upend various supply chain models, especially for e-commerce, with airfreight being the biggest casualty. It remains to be seen what shippers come up with to navigate the new trading landscape.
Meanwhile, between the Red Sea crisis and labor strikes, supply chain disruptions continue to force shippers to switch between East and West Coast ports. Although ports like Los Angeles, Long Beach, and Savannah have recovered lost volume, more shippers are expanding warehouses and operations nationwide to allow them to stay flexible.
Continue reading to stay updated on all the key events rocking the freight world.
Chinese E-Commerce Tariff Shift Could Reshape Air Cargo, Retail
President Trump ordered an end to duty-free imports for low-value e-commerce shipments from China, Canada, and Mexico. This order will force more shippers and businesses relying on international shipments to rethink their supply chain operations. The move, which will ultimately impact the shipping strategies of online retail marketplaces like Shein, Temu, and AliExpress, is expected to hit the air cargo sector the hardest.
Airfreight has been a huge reason for the Chinese sellers’ dominance. They rely on it to ship directly to the consumer, driving up cargo demand and shipping rates. However, with the new restrictions, many Chinese sellers and other international e-commerce businesses may shift to bulk shipments by ocean, slowing delivery times and increasing U.S. inventory costs. Trade professionals are still unsure how to adapt, as customs guidance remains unclear.
Some businesses have prepared for tighter rules by expanding their U.S. warehouse space. Others may relocate operations to countries like Vietnam and Thailand to circumvent restrictions. Meanwhile, air cargo rates could drop significantly as e-commerce volumes decline, leaving excess capacity in the market.
Ocean Carriers Face Falling Rates as Competition Heats Up
Container shipping rates on major east-west trade routes are dropping as carriers adjust to new alliance structures and MSC’s independent network. Analysts expect this trend to continue as competition intensifies. Ocean Alliance, led by Cosco, CMA CGM, OOCL, and Evergreen, now holds the top spot on most Asia-U.S. and Asia-Europe routes, while MSC leads on Asia-Mediterranean.
Maersk and Hapag-Lloyd’s Gemini Cooperation is the smallest player in key markets. Spot rates from North Asia to the U.S. West Coast have fallen from $5,250 per FEU in January to $3,700, with similar drops on Asia-Europe routes. Forwarders anticipate a pricing battle as carriers fight for market share.
Large Trucking Companies Shift Focus to Dedicated Services
Major U.S. truckload carriers are putting more trucks and drivers into dedicated services to give shippers much more reliable capacity while securing steadier revenue. This shift has been gaining momentum for years but has accelerated due to weak freight demand. Companies like J.B. Hunt, Schneider, and Knight-Swift see dedicated trucking as a way to avoid the broader market’s volatility.
Schneider’s acquisition of Cowan Systems helped it increase its fleet’s dedicated service to 70%, up from 33% in 2017. J.B. Hunt’s dedicated contracts, typically lasting five years, generate better margins than traditional truckload operations. Trucking companies are preparing for rising demand by expanding their dedicated fleets, and the freight downturn is expected to end later this year.
Importers Keep Switching Coasts as Supply Chain Disruptions Continue
Over the past few years, importers have repeatedly shifted cargo between U.S. coasts in response to supply chain disruptions. Bottlenecks and potential port strikes at the height of the pandemic across the West Coast ports forced businesses to favor East Coast routes. However, U.S. East and Gulf Coast labor strikes, Red Sea attacks, and the threat of new tariffs have sent many importers back west.
Nonetheless, the ports of Los Angeles and Long Beach recovered lost volume, while Savannah and other East Coast hubs saw gains as businesses adjusted to shifting trade conditions. Companies are expanding warehouses and logistics networks nationwide to stay flexible. The possibility of additional tariffs and uncertainty in global shipping routes will likely keep these shifts going.
Supply Chains Brace for Tariffs on Mexico, Canada, and China Imports
Although the Trump administration has suspended tariffs on Mexico and Canada for a month pending the resolution of key issues, businesses across the transportation sector plan to ensure they are thoroughly prepared for potential tariffs on imports from these countries and China. By volume, imports from these countries make up over half of U.S. imports.
Industry analysts warn that tariffs could raise costs for agriculture, manufacturing, and automotive supply chains, leading to higher consumer prices. Some shippers are moving goods early to avoid potential increases, while others weigh how much cost they can absorb. Logistics providers report that cross-border shipping remains steady, with companies stockpiling inventory on both sides of the border.
If tariffs take effect, the added cost could reach $185 billion for Mexico and Canada and up to $230 billion for China.
Seamless Shipments with COGISTICS Transportation
We’re more than an average logistics provider in the market. At COGISTICS Transportation, we pride ourselves on being your end-to-end partner and driving success through collaborative logistics solutions.
With COGISTICS Transportation, complexity becomes clarity, and logistics becomes a competitive advantage. Leveraging more than 30 years of expertise, we provide innovative, technology-driven logistics solutions and expedited freight by land, air, and sea — around the clock, around the world. Connect with us today.
