The number one question companies are asking this Spring, both directly and indirectly, is: “What should we be doing with our supply chain in light of the administration’s tariff stance and its push to bring manufacturing back to the U.S.?” It’s a question rooted in uncertainty, strategy, and a growing sense of urgency.
For those not following the daily (or hourly) headlines out of Washington, here’s the short version: the U.S. freight and manufacturing sectors are facing a turbulent 2025. A new wave of tariffs has upended long-standing trade patterns, disrupted freight volumes, and injected a new layer of complexity into corporate planning. The Trump administration’s trade policies have prompted many companies to pause, reassess sourcing strategies, and reexamine where and how they manufacture and move goods.
Meanwhile, shippers and logistics leaders are operating in a freight market defined by false starts, fleeting volume surges, and softening demand. In other words, uncertainty is the only constant.
This article explores the full picture: the intersection of trade policy and freight market dynamics. Our goal is to help supply chain leaders make sense of it all and develop a strategy for 2025 that balances caution with flexibility and sets the stage for long-term resilience.
The Freight Market in Limbo
As the second quarter of 2025 unfolds, the freight market remains in a state of limbo—drifting between short-term demand spikes and deeper structural changes. Carriers and shippers alike are taking a “wait-and-see” approach, cautiously scanning for signs of a true recovery while holding back on bold, long-term strategic moves.
In this kind of environment, correctly interpreting market signals is more important than ever. Misreading short-term fluctuations as sustainable trends can lead to costly missteps. For companies aiming to maintain operational resilience amid the noise, clear-eyed analysis and disciplined decision-making are essential.
Market Snapshot: Freight and Tariff Crosscurrents
The market has presented a mix of contradictory signals:
- Spot Rates: Generally flat to slightly down, providing a rare opportunity to lock in favorable contracts.
- Capacity: Loosening in truckload and intermodal markets, though with signs of potential tightening later in the year due to declining Class 8 tractor orders and regulatory constraints.
- Volumes: Early-year bumps in truckload and intermodal volumes were mostly driven by tariff-related frontloading, not organic demand recovery.
Behind these signals lie deeper economic drivers: sluggish consumer sentiment, inflation pressure, Red Sea and Suez Canal disruptions, and broader global uncertainty. As policy volatility persists, many shippers are leaning into short-term adaptability rather than long-term commitments.
Import Supply Chain Under Stress
U.S. importers are canceling or deferring orders in response to sharp increases in tariffs—particularly the 145% duties now applied to Chinese goods. This has caused an unprecedented wave of blank sailings. More than 80 sailings were canceled in April, exceeding early COVID-19 levels.
Forwarders report that bookings from China are down nearly 37% since late March. The Port of Los Angeles projects container volumes will drop more than 43% YoY in early May. Meanwhile, bookings from Southeast Asia buoyed by temporary tariff suspensions on goods from Vietnam and Cambodia have seen modest growth.
Shipping lines are responding with blank sailings, port omissions, and vessel reassignments. For instance, Evergreen Marine and COSCO have removed weekly capacity from U.S.-bound services, while carriers are increasingly consolidating their China-origin networks. Some shippers are shifting goods into bonded warehouses to delay or avoid tariffs, gambling on a near-term policy rollback.
Manufacturing and Retail: Parallel Pressures
Manufacturing output is under pressure as component delays and raw material sourcing issues persist. The U.S. Manufacturing PMI has declined for three consecutive months. Retailers, meanwhile, are sitting on three to four months of inventory and deferring replenishment until they see clearer signals on demand and trade policy.
Some large importers are shifting from monthly replenishment to quarterly waves, spacing deliveries out to hedge against uncertainty and costs. These staggered strategies offer agility but demand precise logistics coordination.
Common Market Misreads to Avoid
In today’s noisy and fast-moving environment, misreading market signals can quickly lead to costly strategic errors. Here are some of the most common missteps businesses should be watching for:
- Confusing Short-Term Bounces with Real Recovery
The Q1 lift in freight volumes was largely driven by tariff-related frontloading—giving the illusion of renewed demand. That illusion is now carrying into Q2, sustained in part by the 90-day tariff suspension for all countries except China. It’s critical to view these gains in context, not as signs of long-term market strength. - Overreacting to Spot Rate Fluctuations
Spot rate movements are increasingly influenced by temporary, policy-driven shifts rather than underlying supply and demand fundamentals. Reacting too quickly to these swings can lock shippers into suboptimal pricing or routing decisions. - Underestimating Long-Term Structural Shifts
The rise of e-commerce, growing sustainability mandates, and the acceleration of reshoring efforts are fundamentally changing freight flows. Ignoring these shifts in favor of short-term tactics may leave supply chains unprepared for what’s next. - Taking Headlines at Face Value
While the administration initially signaled a long-term focus, recent messaging suggests a softening stance—likely in response to mounting pressure from stock and bond markets signaling elevated recession risks. As a result, we’re seeing more “trial balloons” floated in the media—policy ideas tested publicly before being formalized. While this strategy may help stabilize global financial markets in the short term, it continues to press on the accelerator of uncertainty for business leaders, keeping them in a reactive and defensive posture.
General Business Strategy Moving Forward
As tariff pressures intensify and freight markets remain volatile, business leaders are rethinking how they approach both operational planning and long-term investment. The C-suite is moving away from aggressive growth tactics and instead embracing more measured, risk-aware strategies designed to preserve optionality and protect profitability.
While no one can fully predict how trade policy or market dynamics will evolve through the rest of 2025, companies are positioning themselves to stay agile, protect cash flow, and adapt quickly as conditions change.
Key priorities include:
- Pausing Major Capital Commitments
Investments in logistics infrastructure, such as new distribution centers, fleet expansion, and automation projects are being delayed unless they are clearly backed by long-term strategic necessity or unavoidable operational need. - Bolstering Working Capital and Managing Vendor Risk
Liquidity preservation is becoming a top focus. Companies are strengthening cash positions while reassessing supplier relationships to identify concentration risks, especially with vendors located in tariff-impacted regions. - Enhancing Supply Chain Visibility
Visibility tools—especially those that provide real-time insight into global inventory levels and multimodal transit times are being prioritized. The ability to make faster, data-driven decisions across the supply chain is becoming a competitive differentiator. - Building Procurement Flexibility
Procurement teams are shifting from rigid, long-term contracts to more dynamic strategies. This includes using spot bidding, market index-linked agreements, and short-cycle contracts that allow companies to respond more quickly to price and capacity changes.
This more cautious, adaptable playbook reflects a broader reality: agility is no longer just a best practice, it’s a baseline requirement for navigating today’s shifting economic and policy landscape.
Strategic Recommendations for Shippers
Now more than ever, supply chain and transportation strategies must be grounded in optionality, flexibility, and resilience. The freight market of 2025 is no place for rigid playbooks. Instead, shippers need to build adaptive frameworks that can respond to policy swings, demand shifts, and operational disruptions without compromising performance.
Here’s how many are adjusting their strategies:
1. Use the Rate Lull Wisely
Subdued contract pricing has created a rare opportunity for shippers to renegotiate long-term agreements. Locking in competitive rates now can provide cost stability before tariffs and inflationary pressures work their way deeper into transportation costs.
2. Reengineer the Supply Chain
As tariff uncertainty continues to ripple through global trade networks, companies are rethinking the architecture of their supply chains to build in more flexibility and risk mitigation. Here’s how they’re approaching it:
- Establish U.S. Foreign Trade Zones (FTZs)
Many companies are evaluating the use of FTZs or partnering with third-party logistics providers (3PLs) that operate them. By deferring customs clearance into the U.S., FTZs allow businesses to delay tariff payments until goods are formally entered into domestic commerce. This strategy offers valuable breathing room while trade policies remain in flux. - Explore Nearshoring—Cautiously
Nearshoring to Latin America and other parts of North America remains a strategic consideration. However, projects requiring significant capital investment are largely on hold. Most companies are waiting for more definitive tariff agreements before moving forward, recognizing the risks of committing to large-scale shifts based on uncertain policy direction. - Adjust Sourcing Strategies Where Feasible
- Short-Term: Businesses are actively shifting sourcing for more generic or commoditized products that are heavily impacted by retaliatory tariffs. These changes are easier to execute and provide immediate relief from elevated costs.
- Long-Term: For more complex or business-specific SKUs, companies are developing contingency plans but largely refraining from execution. The rationale is clear: making multimillion - or even multibillion - dollar changes based on policy signals that may not materialize is too risky. Until negotiations firm up, capital commitments remain off the table.
3. Monitor and Respond to Capacity Shifts
Private fleet expansion is becoming less economically viable due to regulatory uncertainty and rising vehicle costs. Some companies are shifting freight back to the for-hire market, seeking flexibility amid capacity fluctuations.
4. Diversify Modal Strategies
Intermodal continues to be a cost-effective hedge against truckload volatility, particularly on long-haul corridors. Shippers who maintain a healthy balance across modes can better manage capacity constraints and rate fluctuations.
5. Plan for a Volatile Q3/Q4
The second half of the year is expected to bring headwinds from consumer spending slowdowns, tariff reinstatements, and ongoing destocking. Shippers are responding by building buffer into lead times, positioning inventory closer to demand centers, and maintaining flexible routing guides.
6. Watch Port and Global Routing Trends
As Red Sea and Suez Canal disruptions continue, West Coast ports are regaining volume. Shippers should stay alert to shifts in port performance, dwell times, and inland intermodal capacity to avoid downstream congestion.
7. Understand the Profitability Gap
Volume alone isn’t a growth strategy. Contribution margin analysis is essential in today’s environment - each load must serve broader financial goals.
8. Track Consumer Sentiment and Behavior
Final mile services are particularly vulnerable to shifts in consumer confidence. Agile logistics models that can scale with demand will be essential for retailers and direct-to-consumer brands.
9. Stay Policy Aware
With tariff structures still in flux, supply chain leaders are tightening alignment with customs brokers, trade advisors, and compliance teams. Proactive engagement allows for quicker response to regulatory changes—and helps to avoid being caught flat-footed.
10. Prioritize Data Over Headlines
Shippers are increasingly relying on near real-time data - from earnings reports and inventory positions to carrier schedules and port analytics - to bridge the gap between lagging economic indicators and what’s actually happening on the ground.
A Strategic Pause Before the Pivot
The rest of 2025 will likely be shaped by inflation headwinds, tariff uncertainty, and a fragile consumer landscape. While some clarity may arrive by year’s end, most supply chain leaders are looking to 2026 as the true reset point.
Now is the time to play smart defense: renegotiate, diversify, and build the muscle memory needed to adapt quickly. Don’t mistake caution for inaction. By taking calculated steps today, businesses position themselves to thrive in whatever version of the post-tariff economy emerges next.
The next upswing will favor the strategically prepared—those with the foresight to adapt before the momentum returns.
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