How Can Trucking Companies Minimize the Impact of Tariffs?

The threat of tariffs has put many trucking and freight companies on alert. With increased product costs expected to affect multiple aspects of the economy, many businesses are looking for ways to combat tariffs. Trucking companies that expect to be impacted by the incoming tariffs want to know — how can trucking companies minimize the impact of tariffs? We are here to help answer your questions. 

Best Strategies to Minimize the Impact of Tariffs in the Trucking Industry

Navigating the uncertain economy brought on by tariffs requires trucking and freight companies to be resilient and strategic. The trucking industry in the United States and Canada is responsible for hundreds of billions of dollars in cross-border trade each year and tariffs represent a significant challenge to current operations. The success of many companies will hinge on controlling costs, optimizing existing operations, and being versatile in a complex economy. Implementing comprehensive data analytics, powered by a Transportation Management System (TMS), is an important step for companies to identify operational inefficiencies and make informed data-based decisions quickly in a complex economy.

Maintain Successful Strategies

With uncertainty caused by tariffs, trucking and freight companies may be tempted to overhaul operations — but in many cases, sticking to what works may be a better strategy. Analyze what aspects of your business are most successful, customer relationships, and operational procedures and optimize those elements of your business. A reliable TMS provides the data you need, helping track profitability per lane, on-time performance, and customer satisfaction metrics. By putting additional focus and resources toward proven, profitable areas identified by this data, companies can build a strong foundation even when external factors like tariffs can make the economy more volatile.

Optimize Operations to Reduce Costs

Rather than expanding routes or fleet size with anticipated tariffs on the horizon, it may be more valuable to focus on optimizing existing operations to cut costs. This means streamlining workflows, maximizing the use of your assets, and minimizing waste are critical to success. A TMS is an invaluable tool in this strategy that enables route optimization to reduce fuel consumption and mileage, facilitate load consolidation to ensure trucks run full, and improve efficiency. Using TMS data for preventative maintenance scheduling can also help prevent costly breakdowns and delays, helping trim operational expenses without requiring significant investment.

Prioritize Profitability Over Volume

Tariffs will have an impact on profit margins for trucking companies, either via reduced volume or increased component costs, and chasing volume can be detrimental to your success. When profit margins are impacted, it is important to shift the focus to maximizing profitability on the business you do have. Analyze data to determine which customers, lanes, and types of freight provide the best returns and focus on those customers. A TMS provides the tools that you need to analyze customer data and allows you to create detailed cost breakdowns per load against potential revenue, highlighting the most and least profitable aspects of your business so you can prioritize customers in the right order.

Employ Shorter Planning Cycles

In a constantly-evolving economy, more traditional annual or even quarterly planning cycles may be too slow to react effectively to the rapid changes tariffs can bring to the trucking industry. Moving to shorter cycles, such as monthly or even weekly reviews of your operations and data, allows for better versatility and adaptability. This enables quicker adjustments to routing, pricing, and capacity based on the current market conditions. A TMS supports this more agile approach by providing near real-time data dashboards and customizable reports, allowing you to quickly assess performance, identify growing trends influenced by tariffs, and make data-based decisions faster.

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READ MORE: How To Manage Cost-Per-Mile in Trucking

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The impact of tariffs in trucking can be minimized by proactive management, operational efficiency, and data-driven decisions. By maintaining successful core operations, optimizing current operations, prioritizing profitable aspects of your business, and adopting a more agile strategy, trucking companies can better weather the storms of an evolving economy.

Are you ready to improve operational control and profitability in the face of market changes and tariffs? Contact TransPlus today for a demo of the TransPlus TMS and see how it can help your trucking company succeed!

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