What’s the Ripple Effect on Freight, Ports and Trucking?
Hughes described the supply chain like a water balloon – when there’s pressure on one part, the water shifts from one area to another. That same scenario is playing out now, with demand spikes from importers rippling to container shipping, U.S. ports and eventually trucking.
“You’ve got that likely significant bottleneck impact in logistics, from shipping all the way through trucking,” Hughes said.
Ocean carriers are readjusting their capacity in light of the tariff pause and an uptick in new bookings. Before, with the higher tariff rate, carriers had shifted some of their empty containers and vessels to other lanes as China-U.S. demand dropped, according to Judah Levine, head of research at Freightos.
“So while those are being moved back into position, there may also be some capacity restraints that could also contribute to upward pressure on freight rates together with increased demand,” Levine said.
Levine said ocean carriers already announced rate increases of as much as $3,000 per container.
“Rates are very likely to increase significantly soon as demand picks up,” – Judah Levine, head of research at Freightos
Peak season in ocean shipping typically begins in July, but Coulter-Lissman sees ocean lines “taking advantage of the surge” and implementing peak season surcharges earlier, starting June 1.
Once those ships from China begin arriving to U.S. West Coast ports, Coulter-Lissman expects “pretty heavy congestion,” which could create equipment issues for trucking companies, such as an imbalance or shortage of chassis.
Jim McCullen, chief technology officer at Century Supply Chain Solutions, said short-haul carriers may need to increase their capacity without much notice nor time to plan. Port drayage lanes could be strained as volume and demand suddenly surge.
Overall, McCullen anticipates a short-term volume spike for ports and logistics, “but it’s a false peak.”
While the 90-day pause could temporarily help by bringing in volume and more business, it distorts the ability to plan capacity longer term.
“Trucking companies risk overcommitting resources if they treat this like sustainable growth,” McCullen said.
The pause only adds to the uncertainty transport leaders have felt since the imposition of higher China tariffs. The Tech.co survey revealed logistics companies were split on whether to anticipate reduced demand, with 40% preparing for lower demand, but 39% not preparing, and the remaining 21% responding, “I’m not sure.”
