With new tariffs taking effect, trucking rules shifting, and global shipping disruptions growing, U.S. supply chains are facing a challenging summer. Karl Fillhouer, Vice President of Sales and Operations at Circle Logistics, shares his take on what these changes mean for freight volumes, logistics planning, and the months ahead.
Supply Chain 24/7: What is your initial reaction to the 90-day tariff reduction agreement between the U.S. and China?
Karl Filhouer: This temporary easing is a cautiously positive step; however, a short-term ‘fix’ will not compensate for the long-term damage being done with our trading partners from around the globe. The U.S. is dependent on China and other global trading partners, whether we want to admit it or not, at least in the short term. These tariffs, in my opinion, will ultimately increase the cost of living in the U.S.
SC247: How might this temporary easing of tariffs influence shipping volumes and logistics operations in the near term?
KF: In the near term, we could see an uptick in trade volumes as companies attempt to capitalize on lower tariffs. This might lead to increased shipping activity, particularly on routes impacted by the initial tariffs. The on-again, off-again tariffs are disrupting trade lanes around the entire globe. My belief is that the tariffs are creating surges in shipping. In the U.S., it’s the purchasing activity from businesses reacting to the tariffs that’s driving logistics operations to ensure capacity and flexibility to manage potential spikes.
SC247: Beyond the current tariff developments, what long-term strategies are shippers adopting to mitigate risks associated with trade policy volatility?
KF: Shippers are diversifying their supply chains, exploring nearshoring or reshoring options, and creating buffer inventories. They’re also building stronger relationships with multiple suppliers to avoid relying too heavily on any single source.
SC247: How are companies balancing the need for cost-effective shipping solutions with the demand for faster delivery times?
KF: They’re using smarter logistics strategies—optimizing routes, mixing modes depending on urgency and cost, and improving inventory management to lower carrying costs. Data analytics and AI are becoming essential in striking that balance.
SC247: What trends are you observing in modal shifts, such as ocean freight to air freight, in response to global supply chain disruptions?
KF: Yes, things are more dynamic. Ocean freight remains cost-effective, but air freight is being used more for urgent shipments or high-value goods. The increased use of air freight—both for imports and domestic movement—will drive up costs, which will be passed along to consumers.
SC247: Can you discuss the impact of recent geopolitical events on cross-border logistics and how companies are adapting?
KF: Geopolitical events bring a lot of volatility, but honestly, the Trump tariffs are causing more disruption than many geopolitical events. Companies are adapting through scenario planning, diversifying logistics hubs, and improving risk strategies. Strong local partnerships and flexibility are key. We live in a global economy, and trying to isolate ourselves will only hurt the U.S.
SC247: What role does technology play in enhancing supply chain resilience amid ongoing global challenges?
KF: Technology helps a lot. AI forecasting, real-time tracking, blockchain, and automation all improve visibility and response times. But technology alone won’t fix the labor shortage across the supply chain.
SC247: How do labor shortages and port congestion affect logistics planning and execution?
KF: They’re still driving up delays and costs. Companies are building in longer lead times, looking at alternative ports, and investing in automation. Better communication with carriers and port authorities is also essential. It’s tough and expensive to manage the import surges and the domestic ripple effects.
SC247: What measures are being taken to improve visibility and transparency across the supply chain?
KF: Yes, companies are investing in tracking systems, IoT devices, and collaborative platforms that offer real-time data. But even with more visibility, it won’t fully offset the disruptions caused by unpredictable tariffs.
SC247: Looking ahead, what key factors should logistics professionals monitor to stay ahead of potential disruptions?
KF: They need to track geopolitical shifts, new regulations, economic indicators, and tech trends. Most U.S. supply chain pros understand we operate in a global network. The short-term impact of these tariffs could crush small businesses. Chinese media is heavily covering the surge in U.S. buying, and in places like Shanghai, logistics providers are struggling to keep up with the demand.