Tariffs and Hurricanes Challenge U.S. Supply Chains, ITS Reports

The July ITS Supply Chain Report by ITS Logistics sheds light on the significant impact of tariff volatility on the U.S. economy and the national drayage market, alongside the anticipated effects of an above-average hurricane season on the trucking industry. With the U.S. economy in a 'controlled cooling' phase, as described by Josh Allen, Chief Commercial Officer at ITS Logistics, the report highlights the gradual easing of inflation amidst a stable labor market. However, the resurgence of tariffs under President Trump's administration has introduced uncertainty, influencing broader economic trends and consumer costs. The Federal Reserve's decision to maintain the benchmark rate between 4.25% and 4.50% reflects a cautious approach to these economic pressures.

Amidst these challenges, the drayage market saw a 1.8% month-over-month rise in June imports, with the Port of Los Angeles experiencing significant volume increases. Conversely, East Coast and secondary ports faced declines, illustrating shifting trade dynamics. The report also notes the climbing diesel prices, reaching $3.75 per gallon, the highest since last July, and the looming hurricane season, predicted to be above normal, posing additional risks to supply chains. Despite these disruptions, the warehousing market shows signs of rebalancing, offering a glimmer of hope for the industry moving forward.