Global trade dynamics are undergoing a fundamental transformation, driven in part by tariff policies introduced by former U.S. President Donald Trump. According to Peter Sand, Chief Analyst at Xeneta, while these developments pose significant operational challenges, they also present an opportunity for shippers to adapt, optimize, and emerge more resilient. Strategic agility and data-driven decision-making will be essential.
Below are seven key recommendations from Peter Sand to help shippers navigate this period of volatility:
1. Monitor Trade Route Shifts and Market Direction
As tariffs elevate the total landed cost of imports to the United States, it is critical to distinguish between contract rates and the broader implications of these increased costs. The pressure on profit margins necessitates aggressive cost containment across supply chains. One area of opportunity lies within the declining ocean freight market.
Xeneta data reveals a sharp drop in spot rates since January 1st—down 43% into the U.S. East Coast and 50% into the U.S. West Coast from the Far East. With the 2024 frontloading effect diminishing, further rate reductions are expected.
Despite attempts by carriers to halt the decline—evident on April 1st when spot rates temporarily surged by 8% (East Coast) and 14% (West Coast)—shippers should avoid reacting emotionally. Instead, they must rely on verified data, ignore short-term market noise, and align freight procurement strategies with their business’s true requirements.
2. Maintain Operational Flexibility
The scope and scale of the new tariffs are vast, and it will take time to fully comprehend their long-term effects on specific supply chains. However, time is a scarce resource—goods must continue moving. In this context, operational flexibility becomes essential.
Organizations should evaluate alternative trade routes, rebalance cargo volumes across different service providers, and explore modifications to manufacturing locations. These adjustments are often complex and time-consuming, underscoring the need for contract flexibility. Future long-term freight agreements should include provisions that allow for renegotiation based on defined market triggers.
3. Simulate Alternative Supply Chain Configurations
“Inaction will be penalized,” warns Sand. Boards and shareholders will demand accountability—specifically, how companies are mitigating risks arising from tariffs.
The silver lining is that companies now possess actionable data. While those numbers may not be favorable, they provide a foundation for scenario planning. For example, during Trump’s first term, many companies shifted manufacturing out of China to countries such as India, Vietnam, and Cambodia. While the viability of repeating such investments is now uncertain, analytical simulations remain essential.
Shippers should model scenarios for alternative sourcing locations—factoring in freight rates, available container capacity, and carrier performance benchmarks. Procurement teams play a pivotal role by continuously assessing the risk/reward dynamics of these alternatives, ensuring organizations are ready to act swiftly when necessary.
4. Adapt to the New Compliance Landscape
Tariff navigation has become a compliance-driven challenge, and shippers must now be innovative with their global logistics strategies. For example, Brazil—with a trade surplus with the U.S.—has largely avoided the steepest tariffs, facing only a 10% base rate.
One theoretical strategy involves routing goods from China to Brazil before onward shipment to the U.S., reclassifying the origin via repackaging or value-add processes. While this increases operational complexity, the tariff scale provides strong incentives for such creative solutions.
As a result, traditional trade lanes—like Shanghai to New York—are no longer sufficient. Companies must access granular, multi-market data across both primary and secondary routes to map out viable alternatives. Supply chains of the future must be dynamic, adaptable, and globally integrated.
5. Go Beyond Spot Rates
If businesses are pursuing alternate routes, they must also consider the infrastructure and operational viability of those corridors. Key variables include port capabilities, vessel availability, schedule reliability, and rate variability.
For example, rerouting cargo via Brazil may necessitate switching from the existing carrier network. Shippers must evaluate whether their current providers remain the optimal choice under these new logistics configurations.
6. Evaluate Index-Linked Contracts
Given the structural volatility in global shipping markets, procurement teams face mounting pressure. Managing freight negotiations across an expanding set of trade lanes may strain resources.
One potential solution is the adoption of index-linked contracts. These agreements tie pricing to agreed market indices and fluctuation thresholds, minimizing the need for continuous renegotiation. This allows procurement teams to focus on strategic modeling and long-term scenario planning rather than reactive rate management.
7. Prioritize Reliable Market Intelligence
Venturing into new trade routes or working with unfamiliar logistics providers requires accurate, trustworthy intelligence. Access to dependable market data is critical when expanding into regions or ports not traditionally used.
As an example, some shippers may consider routing goods through Peru on the South America West Coast as a new gateway into the U.S. West Coast. However, doing so requires understanding the complex geopolitical dynamics of the region.
Despite the challenges, history demonstrates that trade always finds a way forward. Whether it was the disruptions caused by COVID-19 or the Red Sea crisis, supply chain professionals have repeatedly adapted. The difference in 2025 is the availability of data—there has never been more information or tools at our disposal to support real-time, informed decision-making.
“Trade will recover. It always does. The supply chain industry has proven its resilience time and again. With the right strategies, data, and mindset, we can not only weather this storm—but come out stronger.”
— Peter Sand, Chief Analyst, Xeneta
Source: https://safety4sea.com/xeneta-key-actions-for-shippers-amid-global-supply-chain-turmoil/
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