Tariff risk pushes firms towards faster freight modes

Infios has published research showing that companies are changing transport modes in response to tariff risk, pointing to a broader shift in how global trade is managed.

Based on a year-on-year analysis of more than one million US customs entries, the report argues that tariffs now shape day-to-day supply chain decisions rather than being a predictable cost item. Businesses are adjusting classification, routing, warehousing and transport choices as trade policy changes.

One of the clearest shifts was in freight mode. Air freight rose by about 12 percentage points and remained elevated, while ocean freight fell by around 10 to 12 percentage points and did not recover over the period studied.

That pattern suggests some importers are prioritising speed and flexibility over lower shipping costs. Truck freight also increased by about eight percentage points, which the report links to nearshoring and a move towards shorter supply chains.

For companies with Australia-linked supply chains, the findings add to concerns about how overseas policy decisions and regional conflict can affect shipping routes, costs and inventory planning. Although the study focuses on US customs data, its conclusions reflect wider shifts in the movement of goods across international networks.

According to Infios, the initial response to the 2025 US tariff policy was marked by short-term changes in route and mode selection. Importers experimented with what it described as panic routing, temporary surges under the United States-Mexico-Canada Agreement and greater use of faster transport as firms sought to avoid disruption.

Over time, those reactions developed into more permanent changes in execution. The report argues that this amounts to a structural redesign of global trade operations rather than a brief response to a single policy shock.

Another notable finding was the rise in the use of bonded warehouses. The share of entries using bonded warehousing increased from about 10 per cent to roughly 16-18 per cent, indicating that more companies are deferring duties as part of standard operating practice.

Classification also became more complex. Infios said the complexity of Harmonised Tariff Schedule classification nearly doubled, from about six sequences per entry to about 11.6, adding pressure on compliance teams and making manual processes harder to sustain.

The data also showed that shipment value rose by about 78 per cent, while entry counts fell by about seven per cent. That points to larger, more consolidated shipments rather than a retreat from cross-border trade.

Not every sector responded in the same way. Consumer goods and light manufacturing moved further away from China, while speciality chemicals and industrial components remained more dependent on existing supply sources despite tariff exposure.

In parallel, some trade corridors expanded while others weakened under policy pressure. The data showed early signs of manufacturing relocation as companies reconsidered where goods should be made, stored and transported.

Ed Auriemma, Chief Executive Officer at Infios, said the research reflects a wider operational shift.

"At Infios, one of our guiding principles is Thinking Ahead, helping customers to anticipate change instead of reacting to it after the fact. This research highlights how global trade patterns are evolving and where companies are adjusting routes, transportation modes and execution strategies in response. Organisations that recognize those shifts early and respond quickly will be best positioned to deliver execution without interruption," he said.

Duty rates in some categories were 20 to 80 per cent higher because of tariff stacking, adding another layer of uncertainty for importers. That means companies are reacting not only to headline tariff levels but also to how multiple duties combine on specific goods.

Don Mabry, Senior Vice President, Global Trade Solutions at Infios, said the effect goes beyond sourcing decisions.

"What we're seeing isn't just a shift in sourcing or supplier mix. It's a fundamental change in how trade is executed. Tariffs have introduced a level of volatility that companies can no longer manage with periodic adjustments or manual processes. Organisations able to sense change early, evaluate options quickly and reconfigure execution paths will outperform those operating within rigid, single-path systems designed for a more stable world. The organizations that treat trade execution as a dynamic discipline, not a back-office function, are the ones gaining a durable competitive advantage," said Mabry.