Tariff Volatility and Hurricane Season Pose Challenges for U.S. Supply Chain, ITS Logistics Report Reveals

The U.S. economy and national drayage market are currently navigating through a period of significant tariff volatility, as detailed in the July ITS Supply Chain Report by ITS Logistics. The report underscores the broader economic implications of these tariffs, including potential disruptions in trade flows and increased costs for businesses and consumers. This comes at a time when the industry is also bracing for an above-average hurricane season, which could further strain supply chains during their busiest period.

According to Josh Allen, Chief Commercial Officer at ITS Logistics, the U.S. economy is in a phase of controlled cooling, with growth slowing but remaining positive. The labor market is described as stable, and inflation is gradually easing. However, the reintroduction of tariffs by President Trump has introduced a layer of uncertainty, influencing economic trends and prompting the Fed to maintain the current benchmark interest rate in the 4.25% – 4.50% range. Investors are anticipating a potential rate cut in September, as inflation showed a slight increase in June.

The drayage market has seen a 1.8% month-over-month rise in June imports, a deviation from typical midsummer trends. This mixed performance across ports highlights the ongoing shifts in port routing and regional demand, further complicated by tariff volatility. Meanwhile, fuel prices have reached their highest level since last July, with diesel prices climbing for the third consecutive week, adding another layer of cost pressure on the trucking industry.

As the industry prepares for the hurricane season, forecasts predict a 60% likelihood of above-normal activity, with 13 to 19 named storms expected. This could lead to significant disruptions in supply chains, particularly in regions prone to hurricanes. Despite these challenges, the warehousing market shows signs of rebalancing, with the Producer Price Index for Warehousing and Storage declining, signaling reduced pricing leverage for providers but also opening up new opportunities for shippers.

ITS Logistics, offering comprehensive network transportation and distribution services across North America, provides these insights to keep its employees, partners, and customers informed about marketplace changes. The report combines data from DAT and other industry sources with expert analysis from the ITS team. For those interested in a deeper dive into the report, ITS Logistics offers a comprehensive copy with expected industry insights and market updates.