Wild shifts in tariffs may be foremost on your mind, and that makes perfect sense; they account for a sizable portion of your costs. But fix your attention on the massive pothole to your left, and you may not see the freight train barreling down the tracks to your right.
Massive, unavoidable supply chain disruption is coming—and it will reverberate throughout the market.
Container volumes at the Port of L.A.—our nation’s busiest—have fallen off a cliff following the 145% tariff on Chinese imports.
Port of L.A. executive director Gene Seroka noted in a May 6 KNX News radio interview, “This week, we’ll see a drop of 35% of our import cargo compared to the same time last year. It’s the first arrival of container ships where the tariff was applied.”
Even if the U.S. and China signed a deal today, it would take two to three months for any real container volume to return to the import market—and it may never fully return.
According to FreightWaves CEO Craig Fuller, imports account for an estimated 20% of U.S. trucking volumes. A significant drop in import activity will thus render the small five-to-10-truck carriers that make up most of our nation’s drayage capacity unsustainable.
We expect these carriers will temporarily lower freight rates to secure loads, but they can’t do it for long. They’ve been white-knuckling a bad freight market for years; their cash reserves are limited.
The trusted carriers hauling your loads today may not be there tomorrow.
When volumes tick back up, expect to find less capacity in the market—driving up your drayage costs. You need to be prepared for this as you simultaneously navigate the impact of tariffs on your business.
Finding carriers to take your loads will become more challenging as we return to early pandemic freight market conditions.
When we do, 3PLs will become your absolutely vital link, just as they were in 2020 and 2021. That’s because seasoned logistics companies have cultivated deep carrier networks. If one partner goes under, they have five to 10 others in that same port or ramp area who can assist.
As you connect with prospective partners, be sure to evaluate whether they’re prepared to serve your needs amid the changing market conditions.
We recommend assessing each 3PL for these five key factors:
Freight fraud is rampant in the industry right now, and the coming supply chain disruption will only exacerbate the problem. Without a robust carrier vetting process, your loads are at risk.
Request the 3PL’s SOP. (Here’s ours for reference.)
When capacity is tight, brokers and carriers take care of their long-term partners first. Meaning, a strong contender whose network doesn’t align with your modes and lanes may be unable to tap capacity when the market tightens.
Ask how many trusted, vetted carriers in their current network match your requirements.
Understanding the unique nuances of your commodity empower 3PLs to move your freight safely and securely.
Ask who will be managing your account, and how many years of experience they have in moving your specific commodity.
A 3PL should offer you a customer portal with fully integrated visibility tools, documentation access, and communications channels. Without it, they simply can’t compete in the shifting market or efficiently serve your needs.
Inquire about the tools they have in place.
This is where you’ll have to rely on your gut feeling.
As you turn over a few loads as part of your trial run, does the prospective 3PL partner make you feel taken care of? Are they responsive to your needs? Their engagement should give you peace of mind. If you’re not feeling confident, move along.
Want to better understand the changing freight market? Or develop a partnership with a logistics company that’s got your back?
Connect with us. We’re a people-first, tech-forward 3PL, and our veteran team proved its mettle during the pandemic—reliably solving the freight challenges others couldn’t.
Connect with us at +1 (732) 333-3238.
