Ongoing trade tensions between major economies, particularly between the US and China, are fuelling uncertainty across global supply chains. As businesses navigate shifting policies, tariffs, and geopolitical pressures, the challenges of moving goods between these two economic powerhouses continues to mount.

“Filtering out the noise has become incredibly difficult, especially with the constant stream of press reports speculating on what may be coming next,” Archival Garcia, Founder and CEO of Fluent Cargo, explained. “This uncertainty has scared a lot of people into rethinking their long-term plans and strategies.

“Many had the right approach before—anticipating tariffs and rushing to get shipments out before any restrictions hit. But now, the landscape changes every week, if not every day.

“Here in Australia, where we have abundant resources and are a major supplier of meat to the US, the situation feels especially chaotic. It’s becoming harder to tell who is a friend and who is a foe.

“I recently spoke with a major carrier, and they’ve essentially paused all evaluations of new contracts and initiatives because they need to make sense of what’s happening first. That’s how disruptive this has become.”

Impact on operations

While long-term shipping rates have remained stable due to existing contracts, short-term rates have experienced sharp declines. Notably, the short-term rate for a 20-foot container from Shanghai to Los Angeles has dropped by 42 percent in the past 30 days, falling from US$2,708 to US$1,947.

Airfreight has been less affected, as the majority of global trade volume remains in ocean shipping, though minor fluctuations have been observed. Meanwhile, cross-regional trade lanes are also under pressure, with routes such as Singapore to Antwerp seeing a 15 percent decline. These trends underscore the ongoing volatility in global trade, with certain markets experiencing more severe disruptions than others.

“We’re seeing a slight increase in air freight for faster delivery, but overall, the impact has been limited. Ocean freight prices have dropped significantly, so most shippers are still waiting to understand the long-term implications before making major changes. The big risk is sending a shipment now, only for regulations to shift by the time it arrives. That uncertainty is making companies hesitant,” Garcia expressed.

“While airfreight has seen a small uptick and its rates have remained relatively stable, ocean freight is a different story. The decline in shipping volumes is clear—spot rates, which are typically used to incentivize shipping, have dropped by 50 percent. This signals just how aggressive carriers are getting to attract shipments and offset the slowdown.”

Real-time requirement

Access to real-time information has become increasingly vital for shippers and forwarders. While the unpredictability of changing regulations can still complicate decision-making, the ability to receive up-to-the-minute updates plays a crucial role in effective planning.

The push for change is driven by necessity. During the pandemic, the industry began to experience frustrations with outdated systems, leading to some moves towards improving visibility and efficiency. However, once the immediate crisis subsided, many companies reverted to their traditional ways of working, which remain slow and imprecise.

This reluctance to adopt faster, more agile solutions has left many in the industry struggling to keep pace with growing demand for data and more flexible supply chain management.

“There’s a real need for more real-time planning and execution, specifically around schedules, availability, and route options,” Garcia highlighted.

“Traditional TMS tools aren’t built for this—they’re designed to manage large orders over a month and recommend the most efficient path based on fixed volumes and assets.

“However, that’s where we come in. Our solutions offer up-to-the-minute rates and speed estimates, presenting a variety of options tailored to current conditions. In this environment, our real-time capabilities have become more valuable for shippers, helping them respond to disruptions more effectively.”

Consolidation is in sight

With this in mind, the pressure is mounting on traditional freight forwarders, as they realize they can no longer rely on inefficient methods. Even carriers are frustrated with the slow, manual systems and are seeking to build closer relationships with their clients. As these dynamics unfold, the middle players in the supply chain face significant challenges.

“I think there’s going to be a huge consolidation,” Garcia declared. “There’s going to be a lot of these freight forwarders that are not going to survive the next 10 years, and so they’re going to be eaten up or carriers are going to start doing it themselves.

“Carriers will begin offering more services to gain better control of the end-to-end supply chain and create value in new ways, as the traditional value proposition becomes increasingly challenging.

“In the current market, tenders often turn into a race to the bottom, with companies focused primarily on securing the lowest price.”