How to respond to declining import freight traffic

Retailers have several courses of action they can follow in the face of declining imports and tariff-related disruption.

A recent article in Chain Store Age highlights a clear decline in import freight traffic, driven largely by ongoing tariff uncertainty. This raises critical questions for U.S. retailers that have long relied on imports from now‑tariffed countries.

Some retailers mitigated short‑term risk by stockpiling inventory or shifting production to lower‑tariff countries, and successful alternatives may become permanent. 

Another option—expanding domestic manufacturing—is far more challenging. Rebuilding U.S. manufacturing capacity can take two to three years and involves significantly higher labor and real estate costs, likely resulting in higher consumer prices.

If tariffs are reduced in the future and offshore capacity remains viable, resuming imports may still be cheaper than domestic production. Yet waiting is not an option. Retailers must act now, despite limited choices and trade‑offs.

[READ MORE: Supreme Court rules against tariffs; Trump sets 15% global levy]

Large retailers may pursue a hybrid strategy, combining offshore alternatives, selective domestic investment, and imports. Mid‑sized retailers will likely follow their lead, while smaller retailers face the greatest difficulty due to limited resources and influence. As the industry navigates these constraints, identifying viable offshore alternatives may be the most practical near‑term solution.

Here is a summary of pros and cons:

Stockpiling imported goods (“Hedge” importing)

Pros

• Allowed retailers to maintain product availability in the short term despite reduced import traffic
• Bought time for retailers to evaluate longer-term supply chain alternatives and for tariffs to come down

Cons

• Stockpiles are finite and will eventually be consumed, making this only a temporary solution
• Does not resolve the underlying tariff uncertainty causing reduced import traffic
• Delaying action risks leaving retailers unprepared once inventories run out

Shifting production to alternative offshore countries (Lower‑tariff sources)

Pros

• Existing manufacturing capacity may already be available, reducing startup time.
• Prices are expected to be no worse or only slightly higher than pre‑tariff prices.
• Retailers can retain successful new sources long term if results are positive.
• Considered one of the best available options under current conditions.

Cons

• Requires supply chain reconfiguration, which smaller retailers may struggle to execute.
• Larger retailers are better positioned to pursue this option, potentially widening competitive gaps.
• Does not fully eliminate exposure to future geopolitical or trade disruptions (implied by continued offshore dependence). 

Expanding or rebuilding domestic manufacturing

Pros

• Reduces reliance on tariff‑affected foreign manufacturing.
• Offers a potential long‑term strategic solution if sustained over time.

Cons

• Requires two to three years to rebuild domestic manufacturing infrastructure.
• Requires investment to build new or revitalize existing manufacturing facilities.
• Labor and real estate costs are significantly higher than offshore alternatives. 
• Resulting products may be too expensive for current U.S. consumer economic conditions.
• If tariffs are reduced in the future, it may still be cheaper to resume importing than to manufacture domestically.
• Time required may exceed what the industry can realistically withstand.

Continuing to rely on heavily tariffed import sources (Waiting out tariffs)

Pros

• If tariffs are reduced or lifted in the future, retailers could resume importing at lower costs than domestic manufacturing.
• Offshore manufacturing capacity already exists, avoiding the need for new capital investment
• Historically, imported goods have been cheaper than domestically produced alternatives.

Cons

• Ongoing tariff uncertainty makes planning risky and unstable.
• Legal or policy reversals may result in tariffs being reimposed under new justifications, creating repeated disruption.
• Doing nothing while waiting is explicitly described as not a viable option.

Strategic implications by retailer size (as implied in the article)

• Large retailers are most capable of pursuing a hybrid approach across all three options.
• Mid‑size retailers are likely to follow the strategies proven by industry leaders.
• Small retailers face the greatest risk due to limited financial and negotiating power.

Insight summary

• Doing nothing is not an option.
• Large retailers are likely to adopt a hybrid strategy combining multiple approaches.
• Mid‑size retailers will likely follow industry leaders.
• Small retailers face the greatest risk due to limited financial and operational flexibility.

Robert Amster is principal and cofounder of The Retail Technology Group.