Optimization Strategies for Freight Forwarding Services under Trump’s Tariff Increase on China in 2025
1. Introduction
In 2025, the Trump administration implemented a comprehensive “reciprocal tariff” policy, raising China’s tariff rate to 34%. This policy has had a profound impact on Sino-US trade, significantly increasing transportation costs. As a crucial link in trade logistics, freight forwarding companies need to play an active role in this situation. By optimizing transportation services, they can help clients reduce transportation costs and enhance competitiveness.
2. Transportation Mode Selection and Optimization
- Multimodal Transportation Solutions: Combining sea, rail, and road transportation modes to achieve cost reduction and efficiency improvement. For example, for goods transported from China to the US, goods can be first shipped to Mexican or Canadian ports by sea and then transported to inland US destinations by rail or road. This approach not only leverages the cost advantages of sea transportation but also utilizes the flexibility of rail or road transportation to improve efficiency and reduce overall transportation costs.
- Transportation Mode Assessment: Selecting the most suitable transportation mode based on cargo characteristics, urgency, and cost budgets. For non-urgent goods, sea transportation can be chosen, but with careful planning of transportation time to avoid business impacts due to long transportation cycles. For high-value, urgent goods, air transportation can be considered, but negotiations with logistics suppliers should be conducted to secure more favorable prices.
3. Transportation Route Planning and Optimization
- Route Optimization: Utilizing logistics software and technology for route planning and optimization to select the most economical and shortest transportation routes, reducing fuel consumption and transportation time. For instance, by analyzing freight rates, transportation times, and port congestion on different routes, the optimal transportation route can be selected for clients.
- Direct Route Selection: Choosing direct routes as much as possible to reduce transit links, lower transit costs, and minimize the risk of cargo damage. At the same time, avoiding extended transportation times due to transit can improve transportation efficiency.
4. Freight Resource Integration
- Consolidated Shipping Strategy: Collaborating with multiple enterprises to increase the cargo volume per shipment through consolidated shipping, thereby reducing the unit transportation cost. For example, integrating the delivery of goods with similar destinations for multiple clients can reduce single-delivery costs.
- LCL and FCL Services: Providing less-than-container-load (LCL) or full-container-load (FCL) services to consolidate cargo from multiple clients, maximizing loading rates, and reducing the cost per piece of cargo. Additionally,合理安排 (reasonably arranging) cargo combinations can minimize empty load losses.
5. Technology Application and Management Optimization
- Digital Logistics Management System: Introducing a digital logistics management system to achieve real-time cargo tracking and AI-based route optimization. Real-time cargo tracking ensures transportation transparency, allowing clients to monitor cargo status at any time. AI-based route optimization helps enterprises optimize transportation routes, identify, and eliminate cost waste points.
- Smart Warehousing System: Equipping with a smart warehousing system to monitor inventory status in real-time, preventing stockouts or overstocking. Optimizing warehousing layouts reduces unnecessary handling and warehousing costs. Additionally, providing inventory-sharing services to maximize warehousing utilization by offering shared warehousing space for multiple clients.
6. Policy Research and Utilization
- Tariff Planning: Freight forwarding companies should stay updated on international trade policy dynamics and be familiar with preferential policies such as free trade zones, customs unions, and bilateral trade agreements between countries. By reasonably planning the import and export routes of goods and utilizing tariff exemptions or preferential rates in free Trade Agreements, enterprises’ tariff burdens can be effectively reduced. For example, assisting clients in applying for tariff exemptions for goods that meet specific trade agreement conditions.
- Compliance Operations: Strengthening internal management according to trade policy and regulatory requirements to ensure compliance in transportation, customs clearance, and sales of goods. For example, preparing certification documents in advance for products requiring certification and reasonably adjusting pricing strategies for goods affected by tariffs to ensure enterprise profits are not significantly impacted.
7. Overseas Warehouse Layout and Services
- Overseas Warehouse Construction: Establishing overseas warehouses in major market countries or regions to store goods in advance. This reduces the number and distance of transportation trips from China to destination countries, lowering transportation costs while improving delivery speed and customer satisfaction. For example, advising clients with stable demand in the US market to establish overseas warehouses in the US.
- Overseas Warehouse Service Optimization: Providing value-added services such as sorting, packaging, and labeling at overseas warehouses to meet clients’ personalized needs. Additionally, optimizing inventory management at overseas warehouses by reasonably adjusting inventory levels according to market demand and logistics timeliness changes to avoid overstocking or stockouts.
8. Emergency Plan Formulation
- Response to Unforeseen Circumstances: Tailoring alternative transportation plans for clients in response to unforeseen circumstances (such as severe weather, port congestion) to ensure supply chain security and stability. For example, promptly adjusting transportation routes to select other ports for cargo loading and unloading when encountering port congestion.
- Supply Chain Emergency Team: Establishing a professional team to quickly respond to emergencies. Maintaining multi-channel emergency contacts to ensure the switching of multiple transportation modes and avoid losses due to the interruption of a single channel. For example, promptly coordinating rail or road transportation when air transportation channels are blocked to ensure timely delivery of goods.
9. Conclusion
Trump’s tariff increase on China has brought numerous challenges to Sino-US trade but also provided opportunities for freight forwarding companies to optimize transportation services and reduce clients’ transportation costs. Freight forwarding companies should actively respond by implementing strategies such as transportation mode selection and optimization, transportation route planning and optimization, freight resource integration, technology application and management optimization, policy research and utilization, overseas warehouse layout and services, and emergency plan formulation to provide clients with more high-quality and efficient transportation services, helping them reduce costs and enhance competitiveness in complex trade environments.
