How To Reduce Costs and Navigate Tariffs in Trucking

Higher tariffs have led to increased costs and reduced freight volume for many trucking and freight companies. This means that trucking and freight companies must adapt to the current economy and find ways to reduce costs. Freight companies that want to learn how to reduce costs and navigate tariffs in trucking may find the solution with this quick overview of potential strategies created by TransPlus. 

Best Strategies to Reduce Tariff Costs in Trucking

Tariffs can directly impact the cost of doing business in the trucking and freight industry by raising prices on imported cargo and disrupting established supply chains. Effectively managing the challenges presented by tariffs requires more than just absorbing the costs — it demands proactive strategies that combine efficient operations, innovative technology solutions, and an understanding of how to navigate tariff regulations. By focusing on reducing operational costs and employing smart strategies, trucking companies can minimize the financial impact of tariffs.

Here are seven key strategies to consider:

1. Employ a Transportation Management System (TMS)

A robust TMS is critical to efficient operations in trucking and studies have shown that a transportation management system can decrease freight costs by 8% - 10% by optimizing routes to cut fuel consumption, consolidating shipments to lower per-unit costs, and providing data to negotiate better carrier rates to help offset the increased costs of tariffs.

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2. Understand Tariff Exemptions

Knowledge is power and it is important to explore and understand potential tariff exemptions, such as those highlighted by the United States-Mexico-Canada Agreement (USMCA). This includes select North American freight that avoids significant tariffs and duties that could be as high as 25% on select non-compliant goods. A clear understanding of Harmonized System (HS) code classifications for all transported goods can prevent costly errors.

3. Plan Shipments for Off-Peak Hours

Companies can mitigate potential tariff-related port or warehouse congestion and reduce costly detention fees by scheduling pickups and deliveries during less busy, off-peak hours whenever possible. This can also improve driver and asset utilization, and contribute to overall operational efficiency that helps counter other cost increases.

4. Communicate and Negotiate Costs with Partners

To reduce costs, it is important to maintain open communication with shippers about how tariffs directly impact transport costs and explore options for rate adjustments or shared cost efforts where appropriate. It is also important to discuss tariff-related price increases with your own suppliers to understand their impact and reduce costs when possible.

5. Use a Diverse Strategy (Carriers/Routes/Suppliers)

Reliance on a single carrier, route, or supplier can spell disaster when tariffs impact transportation and freight. Companies can improve operational flexibility by diversifying their network. Avoid over-reliance on single trade routes, ports, carriers, or suppliers that might be heavily impacted by tariffs, allowing you to pivot more easily if your supply chain is disrupted.

6. Anticipate the Impact of Tariff Changes

When faced with an uncertain economy, it is important to stay vigilant by monitoring the current and future trade policies as they develop (both domestic and international), geopolitical events, and economic forecasts. Anticipating potential tariff shifts allows for a more proactive strategy for your operations, pricing, and load planning.

7. Improve Compliance and Customs Policies

Improve your customs compliance efforts by ensuring all documentation (like eManifests, commercial invoices, bills of lading) is accurate with correct valuations, quantities, and tariff codes. Detailed compliance helps prevent expensive delays, inspections, fines, or cargo holds specifically related to tariff enforcement at international borders.

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READ MORE: What Is the Average Cost-Per-Mile in the Trucking Industry? 

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Learning how to reduce costs and navigate tariffs in trucking through strategic planning, adoption of innovative tech solutions, an in-depth understanding of regulations, and operational efficiency is key to protecting profit margins. Use these key strategies to adapt to the challenges presented by tariffs.

Contact TransPlus for more information about our TMS solutions for trucking and freight companies!

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