Tariff uncertainty creates 'sit on their hands' syndrome in supply chain industry

Uncertainty from tariffs is plaguing supply chains, creating measurable impacts on shipping providers struggling to stay afloat. According to logistics experts, ongoing policy indecision and fluctuating tariff announcements may delay industry recovery until mid-to-late 2025.

Sitting on their hands: "It doesn't matter at this point whether or not there are tariffs in terms of it impacting the supply chain," says Rick LaGore, CEO of InTek Freight and Logistics Inc. "There's confusion being created because the policy could be one thing in the morning and something different in the afternoon. People are sitting on their hands and they don't know what to do."

InTek Freight specializes in tailored domestic intermodal services that help customers with cost efficiencies and their overall environmental footprint. 

Disrupting patterns: The logistics executive explained that this uncertainty has already affected goods movement, regardless of whether tariffs are ultimately implemented. Companies are hesitant to make inventory decisions when policies change rapidly, disrupting normal shipping patterns.

LaGore points to a specific example: "We have a customer that ships from the US into Canada. When tariffs were suddenly announced, they told us to ship as much as possible before shutting off completely. Then when tariffs were paused, it took them a full week to resume normal shipping patterns—only to face another potential tariff implementation."

Intermodal: Through InTek's intermodal spot rate index, which the company has maintained since 2010, LaGore notes that rates peaked in the first week of January before declining—suggesting that early 2024 optimism for a market recovery may have been premature.

"We expected this year to turn around by June," LaGore says. "But the economic data doesn't show much improving—in fact, it's gotten worse. You hear from Home Depot and Lowe's that the housing market is not strong, and that's one of the great movers of freight during the summertime."

Aiming for the next quarter: With key economic indicators pointing downward and ongoing trade policy uncertainty, LaGore believes the recovery timeline will move later. "We're going to miss the June time period. And now if tariffs actually do go in, we're probably going to have an impact on fourth quarter and then the next opportunity is going to be June of next year."

No one knows the end game: This extended timeline suggests the logistics industry may not see meaningful improvement until mid-2025, creating challenges for planning and investment decisions throughout supply chain.

"It's the overall direction of the economy and what the administration is trying to accomplish," LaGore says, regarding his primary concern. "If everyone fully understood what the end game was, and how that end game was going to be accomplished, business leaders could make the decisions they need to move their business forward."