It’s official. President Trump has announced a 25% import tax on all imported steel and aluminum.Â
What does this mean for mid-size shippers?Â
It is likely to mean that the demand for these raw materials will now be transferred locally, i.e. within the U.S. How long the transfer of this demand may take, however, is up for debate – since these raw goods may not have enough volume locally right away to accommodate the demand.
Which in turn means more demand for domestic trucking, which is likely to drive up spot rates, all other factors being equal.Â
How should you respond?Â
- Review Your Current Freight Contracts: If your contracts are heavily reliant on spot market rates, consider negotiating longer-term agreements with your carriers to lock in more stable pricing before rates climb further.
- Optimize Your Shipping Network: Analyze your freight routes and consolidate shipments where possible. It’s also advisable to familiarize yourself with the raw goods in your areas of interest – including food, steel, and oil – that could impact capacity in the coming months and years.
- Leverage Technology for Better Visibility: Platforms like Portex can help you compare rates, identify cost-saving opportunities, and manage bids effectively, giving you an edge in a tightening market.
- Diversify Carrier Relationships: Relying on a single carrier can be risky in a volatile rate environment. Build a diversified carrier network to ensure capacity and competitive pricing.
- Stay Informed on Market Trends: Regularly monitor industry updates, freight indexes, and economic indicators. Understanding the broader picture helps you anticipate changes and adjust your strategy proactively.
Proactivity is key. By taking strategic steps now, mid-size shippers can mitigate risk associated with rising domestic freight costs and maintain supply chain resilience.
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