Check Call: 3PLs’ role in preparing for tariffs

In this edition: Helping shippers prepare for impending tariffs and some restored service post-Hurricane Helene The post Check Call: 3PLs’ role in preparing for tariffs appeared first on FreightWaves.

Feb 9, 2025 - 22:22

Check Call: 3PLs’ role in preparing for tariffs

A tumultuous weekend, with 25% tariffs promised to go into effect Tuesday with top U.S. trading partners Mexico, Canada and China, has only slightly calmed down after Mexico and Canada were able to put a pause on tariffs for the next month.

Both countries have promised to increase their respective National Guard presence at the border to stop the flow of fentanyl into the U.S. The fentanyl crisis is what President Donald Trump cited as a national emergency that allowed him to impose tariffs without congressional approval under the International Emergency Economic Powers Act (IEEPA).

With two of the three top trading partners on pause working to combat the crisis, that leaves China as the only country with a high tariff levied on goods entering the U.S. A 10% tariff on Chinese imports went into effect Tuesday morning.

The goods that will be most impacted by the tariff are electronics, machinery, toys and games, furniture, plastics, and more.

In response, China has implemented its own tariffs that put additional levies on coal, natural gas, farm machinery and other U.S. products entering China. The Chinese government has also restricted exports of minerals critical to high-tech industries, which poses its own set of problems. The tariffs on goods imported from the U.S. aren’t scheduled to take effect for a few days, leaving time for negotiations that can stop the tariffs altogether.

The pause is a golden opportunity to shore up shippers’ operations and prepare for what could happen if tariffs among the U.S., Mexico and Canada stand following the monthlong hiatus.

Tariffs are looming as bid season comes to a close, meaning shippers need to act quickly on bid awards and on locking rates into place before volatility hits the spot market. With a strong majority of shippers looking to pull forward freight to get in before a deadline, inventory management has become another high priority.

If there’s one thing we’ve learned from the past few years, it’s that supply chains thrive on adaptability. When tariffs disrupt key trade lanes, shippers will need alternative routing options, and brokers are in the perfect position to provide them.

This is a great opportunity to help customers explore different ports, adjust transit methods or shift volume to domestic suppliers. If a shipper’s current lanes are about to get hit with additional costs, consider recommending intermodal solutions or cross-border trucking – or using regional distribution hubs to reduce exposure.

This is where deals are made or broken by your choice in a customs expert. The next few years will see a lot of people trying to get into the customs space, but few can do it well. Just like in 2021 when a new brokerage was popping up every day, it stands to reason with global supply chains and tariff wars that some will be looking to take advantage.

One shipment with incorrect customs paperwork can cost a shipper an entire load’s worth of revenue. That relationship with your customs broker is the one to spend time cultivating now.

Tariffs create uncertainty, but uncertainty creates opportunity — for brokers and 3PLs willing to take a proactive role. Shippers are looking for more than just capacity; they need strategic partners who can guide them through the challenges ahead.

Market check. The largest land crossing by trade volume between the U.S. and Canada is the Ambassador Bridge in Detroit. Should the tariffs on Canadian goods go into effect in a month, Detroit will look a little different. For now, though, it’s experiencing some loosening as outbound tender rejections drop to 2.18%. That’s less than half the national average of 6.42%.

Shippers can continue to expect strong contract carrier compliance in Detroit as outbound tender rejections remain low. Not only that, spot rates should remain relatively stable and low compared to other markets. There might not be a ton of margin to be made on loads into Detroit, but with a decent balance of inbound and outbound freight, it shouldn’t be too bad to make it up on loads out of Detroit to a tighter market.

Who’s with whom. Amid all the tariff chaos and attempts to build a flexible supply chain, there is some positive news. CSX has reopened about 2 miles of damaged rail line in western North Carolina. After Hurricane Helene last year devastated the area, rebuilding has been slow going.

The important thing about restoring this access is service to the customer: The Quartz Corp., which produces high-purity quartz used in the semiconductor industry.

According to a Trains.com article, “The railroad’s Blue Ridge Subdivision north of the customer’s spur through the Nolichucky River Gorge to Erwin, Tennessee, remains out of service as crews continue reinforcing a new roadbed and rebuilding a bridge at Poplar, North Carolina. No public timeline has been provided for the reopening of that line.”

This is the sign of some positive changes and development to the region. Interstate 40 remains closed by the North Carolina and Tennessee border, with a detour still in place, continuing the struggle for trucks passing through the area.