Tariffs have impacted international trade, and the uncertainty among shippers may cause a ripple effect for LTL carriers. Instead of the crunch time shippers and LTL carriers experienced last year, things are slowing down.
The trucking industry, on average, is evening out. Shippers, on the other hand, are unsure of what is coming next, and the first ones to feel the effects will be LTL carriers.
Shipping and Stockpiling
Tariffs have caused a major disruption among shippers. There is currently no unified strategy on how to handle imported goods. Some shippers are immediately hiring LTL carriers to haul goods for fast revenue.
Other shippers are stockpiling goods while they wait to see if tariffs will be removed and business can resume as it was prior to the rush of 2018, or if they will stay, causing a major shift in prices that will be felt down to the consumer level.
As LTL carriers shift from one area to another for shipments based on available quantities, capacity shortages will spring up in other areas. This short-term disruption in the market will ultimately force an increase in costs for truckers and shippers alike the longer this pattern goes on.
Improving LTL Carrier Networks
As things stand, improving LTL networks is challenging because shippers are currently in a state of flux and are trying to find new locations to stockpile and ship goods, and LTL carriers are not always kept in the loop.
The market is currently flat but can peak between now and the end of November, with long stretches of high tonnage. While no one can say for certain how tariffs will pan out or if they will go away, the key to improving networks across the board is for shippers to coordinate with LTL carrier to help each other and keep revenue moving for both sides of the equation.
With low unemployment and with both business and consumer confidence still riding high, shippers need LTL carriers, and they have to work together until a strategy is devised to adjust tariffs and keep supply chains rolling efficiently and cost-effectively.