A post-tariff drop-off hits the market
Trade wars and economic strain
Logistics planning has been distorted due to the increasing uncertainty on the US state trade relations with China and other global trade partners. There are indications within the container activities that once these conflicts subside, the ports in the US, especially those susceptible to intermodal freight shipping, will be filled beyond capacity with freight.
Off-terminal capacity is still a concern. The moment a strong recovery comes fast and furious, off-port infrastructure from drayage fleets to warehouse space might not scale up quickly enough to respond to the soaring demand.
The shrinking capacity problem
Adding to the complexity is the constant shift in drayage capacity. Many owner-operators have been exiting the market or merging with other carriers, thereby subtly contracting availability. Yet, there are issues of capacity excess that tend to keep rates low and small providers struggling to gain profitability.
The situation is likely to be dramatically different in the third quarter, though. There is a prospect of an abrupt increase in demand, prompting shippers and logistics companies to consider more flexible options, such as expedited transportation solutions.
Is a market reset coming?
This lull may not persist, but its ripple effects could reshape the US drayage market. If the trade negotiations remain unresolved, rates and capacity will come under pressure. On the other hand, if the tariffs are lifted or lowered, the restocking of American inventories may cause a disruption that would test every link in the logistics chain.
One thing is clear: the year 2025 will mark a turning point for drayage providers, requiring resilience, foresight, and the ability to scale up quickly.
