The global trade landscape has become increasingly complex and unpredictable, presenting unprecedented challenges for supply chain professionals. At the recent CSCMP EDGE conference, industry experts gathered to discuss strategies for building resilient supply chains amidst trade tensions, tariffs, and market volatility.
Part I: Understanding the Current Freight Market Challenges
The freight market is experiencing its longest downturn in recent history, now lasting 3.5 years—far exceeding the average 54-week duration of previous recessions. Ken Hoexter, Senior Transportation Analyst at Bank of America Securities, attributes this prolonged slump to persistently high inventory levels across retailers, industrial shippers, and manufacturers.
Michael Castagnetto, President of North America Surface Transportation at C.H. Robinson, explains that what began as a capacity-driven downturn has evolved into a demand-driven recession. Excess trucking capacity remains in the market due to factors including a sluggish used truck market, limited bank repossessions, and pandemic stimulus funds.
Chelsea Morris, Vice President of Global Inbound Transportation at Dollar General, emphasizes the importance of value creation in challenging economic times. "In an environment where inflation and other factors are driving up costs, the best way to ensure demand is to provide exceptional value," Morris notes.
Key Challenges in Today's Freight Market:
- Unprecedented duration of freight recession (3.5 years and counting)
- Persistent inventory pressures across industries
- Slow exit of excess trucking capacity from the market
- Weak consumer demand growth impacting freight volumes
- Rising operational costs due to inflation and other factors
Part II: Navigating Tariff Complexities
Tariffs present a double-edged sword for global supply chains, as illustrated by Michael Sekula, Vice President of Global Supply Chain at Inpro. The U.S. government's 50% tariff on aluminum imports has led to domestic production costs exceeding import costs, with aluminum prices rising over 100% since early 2025.
While tariffs successfully prompted some production reshoring, Sekula notes that approximately 80% of U.S. aluminum still comes from Canada. "Building new smelting capacity takes years," Sekula explains. "The tariff impacts won't manifest quickly."
Inpro's experience demonstrates the challenges of supply chain diversification. Despite efforts to shift production from China to Vietnam and other countries, the company still faces tariff challenges with alternative sourcing locations.
Key Takeaways on Tariff Management:
- Tariff impacts are multifaceted and often unpredictable
- Production relocation involves complex cost-quality tradeoffs
- Finding viable alternative sources requires extensive evaluation
- Flexibility in procurement strategies is essential
Part III: Evolving Supply Chain Strategies
Shippers are actively adapting their supply chain approaches through initiatives like "China Plus One" strategies and nearshoring. However, Castagnetto cautions that these transitions involve significant lead times—establishing new production facilities typically requires four to five years.
"Rather than trying to predict future developments, we help clients prepare for multiple scenarios," Castagnetto explains. C.H. Robinson assists companies in analyzing current supply chain configurations, evaluating alternatives, and developing contingency plans for the next 6-12 months.
Morris emphasizes the importance of flexibility in inbound supply chain management, recommending approaches like diversifying sourcing locations, strengthening supplier collaboration, and considering price adjustments as a last resort.
Part IV: Building Supply Chain Resilience
Industry experts highlight seven critical elements for creating resilient supply chains:
- Diversified Sourcing: Avoid over-reliance on single suppliers or regions
- Scenario Planning: Develop contingency plans for various market conditions
- Supplier Relationship Management: Foster collaborative partnerships
- Technology Adoption: Leverage data analytics and AI for enhanced visibility
- Operational Flexibility: Maintain adaptable production and logistics networks
- Risk Assessment: Regularly identify and mitigate potential vulnerabilities
- Cost Optimization: Continuously improve efficiency without compromising resilience
Implementation Strategies:
For Diversified Sourcing: Actively identify backup suppliers across different regions while maintaining strategic inventory buffers for critical components.
For Scenario Planning: Conduct regular risk assessments and tabletop exercises to test response protocols for various disruption scenarios.
For Supplier Relationships: Establish transparent communication channels and joint business planning processes with key suppliers.
Part V: Future Outlook and Adaptation
The supply chain landscape continues to evolve toward greater digitalization, intelligence, sustainability, globalization, and collaboration. Companies must embrace these trends through:
- Strategic digital transformation initiatives
- Investment in supply chain talent development
- Integration of sustainability principles
- Expansion of global partnership networks
- Development of collaborative ecosystems
As global trade navigates uncharted waters, supply chain resilience has transitioned from a competitive advantage to a business imperative. Organizations that successfully implement these strategies will be better positioned to weather market volatility and capitalize on emerging opportunities.