One major threat to the U.S. supply chain has been lifted, with a tentative deal to keep port workers from striking across the East and Gulf Coasts reached last week, but shippers have been frontloading products for the U.S. market in the weeks leading up to President-elect Trump’s inauguration due to the potential for aggressive trade tariffs.
The majority (78%) of respondents to the latest CNBC Supply Chain Survey say shipping clients requested to pull forward freight in anticipation of both the increased tariff threat and the potential strike. Freight was being directed to ports on both East and West Coast. The survey, which sampled executives from member companies in the National Retail Federation and American Apparel and Footwear Association, as well as executives at logistics companies including C.H. Robinson and ITS Logistics, was conducted from Dec. 11-Jan. 6.
Products from China dominated the pulling forward of freight, which matches recent trade data from the Chinese government showing a surge in exports in 2024, and in the month of December, in particular. That was followed by products from Europe, with Mexico, Vietnam, and Malaysia tied for third. India and South America were other areas of product origin being frontloaded.
The No. 1 question from shippers right now is around timing, according to Sri Laxmana, vice president of global forwarding for the Americas at C.H. Robinson, pointing to the recent statement from Trump on declaring a national emergency to execute his tariff plan, which would trigger the tariffs immediately. There have also been recent reports that the Trump economic team is considering a gradual implementation of tariffs over a period of months to avoid creating a sudden inflationary spike.
“Historically, it has typically taken months for full implementation of tariffs using administrative action,” said Laxmana. “Some shippers were already front-loading freight ahead of a possible second U.S. port strike and potential increase in tariffs on Chinese-imported goods. Now, we can add a potential increase in Mexico and Canada-imported goods. This adds to the list of reasons shippers are exploring moving up their freight timelines.”
Paul Brashier, vice president of global supply chain for ITS Logistics, said companies started pulling trans-pacific inventory ahead as early as late November.
“Not only was inventory from China pulled ahead but all transpacific origins as there is a concern that there will be a wave of additional freight brought in as tariffs are announced,” said Brashier. ” E-commerce goods, small appliances, soft goods, and replacement parts are all effected.
The recent tariff headlines highlight the lack of specifics available about Trump’s trade plans pre-inauguration. But Laxmana stressed that “front-loading doesn’t happen overnight and largely depends on the supplier and production’s ability to ramp up.”
For many big companies, the frontloading effort began earlier last year, according to William George, director of research at Import Genius, who reviewed retail customs records. “Walmart’s China-originating U.S. maritime imports are up over 33% from 2023 to 2024,” said George. “Columbia Sportswear’s year-over-year imports are up over 50% from 2023 to 2024, and are up over 80% during the March to December period, when frontloading activity is believed to have spiked,” he added.
Topping the list of items being frontloaded in the CNBC survey were apparel and sneakers, followed by housewares, appliances, and middle-priced goods. Tequila, wine, furniture, and manufacturing and auto parts, were also identified.
“Tariffs remain top of mind for everybody in the industry,” said Stephen Lamar, CEO of the American Apparel & Footwear Association. “Many have accelerated deliveries or are accelerating sourcing diversification strategies to mitigate tariff risk. But no amount of planning can change the fact that tariffs are taxes that fuel inflationary pressures. Even the uncertainty generated by multiple and conflicting tariff threats wreak havoc on business planning, introducing unwarranted supply chain costs.”
Brashier said ITS distribution facilities are also filled with components for future infrastructure projects and solar panels.
“When a construction company bids on a project the price they were quoted and the budget allocated was made years ago,” Brashier said. “We started receiving these types of items in early November. Orders were made back in the spring for fall delivery because it takes time to manufacture and ship products. These companies cannot afford tariff increases because they cannot go back and ask the municipality for more money.”
Brashier added that some critical infrastructure was pulled forward early to avoid any possible supply congestion which could delay construction.
Survey respondents also indicated that shippers were mitigating tariffs by switching to non-Chinese suppliers and manufacturing operations in Vietnam, Cambodia, India, Malaysia, Kenya, Indonesia, Bangladesh, Taiwan, and Turkey.
Brashier explained with the potential changes in tariffs on Mexico exports, Texas is starting to see a major strategic shift in importance. “Right now, clothing, textiles, fabrics are being impacted but there is not a shipper using Mexico or China in their supply chain that is not closely looking at changing up their sourcing and logistics strategy in 2025,” he said.
Jon Gold, vice president of supply chain and customs policy for the National Retail Federation, said there are still a lot of unknowns within the supply chain that retailers are preparing for at the start of the new year. “While strategic tariffs are an important trade tool, the potential for broad-based tariffs on everyday consumer goods remains a concern,” said Gold. “Retailers will continue to plan for mitigation and supply chain diversity to ensure resiliency and preparedness ahead of new potential challenges.”
While the prospect of an aggressive start to trade policy in a second Trump term looms, it is also a time of year when frontloading occurs due to major holidays in Asia. More than 60% of respondents said Lunar New Year freight, which consists of spring and summer products, were also frontloaded to avoid any supply chain disruption.
Ben Bidwell, director of North America customs and compliance for C.H. Robinson, has been advising clients to closely consider and coordinate with their finance department and pull forward inventory to potentially beat an increase in tariffs.
“Shippers should run risk scenarios to understand impacts at different rates, while also identifying areas where you could add more agility and diversification into your supply chain,” said Bidwell. “This will allow for contingency planning as timing looks like it could be adjusted amid the new administration.”
Consumer demand remains strong
Forecasts for consumer demand remain healthy, based on the volume of freight being imported, with 43% of respondents saying they saw an increase of 5%. The other half of respondents saw the same level of orders, or a slight increase, of 3%.
Recent national data on retail sales also indicates a healthy holiday spending season.
The majority of items being imported during the Lunar New Year freight order period (83%) are classified as “mid-price point.” Seventeen percent were “lower-price point.” Respondents to the survey indicated no freight orders in the higher-end price point category.
Stress on higher-ticket discretionary items among consumers who continue to spend but are being more careful was clear from the data on products now being moved out of warehouses and into stores for holiday replenishment. Higher-end price point product replenishment (17%) was at half the level of middle-point price products, and far below home goods, apparel, and sneakers.
The trucking industry, which had battled a deep freight recession in recent years, continues to stabilize, according to the survey. Over half (57%) of respondents said they expect trucking freight rates to rise in the first quarter, while another 30% said pricing should remain the same. The exact timing of any rebound remains in flux though, with trucking bellwether J.B. Hunt reporting mixed results on Thursday: higher volumes but persistent pricing pressure that hurt earnings, and weighed on shares.
The survey results falls in line with long-haul trucking rates out of Southern California, which have been supported by the tariffs strategy and movement of containers to the West Coast amid the strike threat.
The average per mile rate out of Los Angeles in December rose 5% from November to $2.77, a 26-month high, according to data compiled by Journal of Commerce from Cargo Chief, DAT and Loadsmart. Average long-haul rates out of the East Coast have remained steady.