Tariff Tensions Squeeze Smaller Ports and Importer Cash Strategies

As the impending August tariff deadline approaches, shippers are shifting volumes to major ports and deploying creative financing to protect cash flow. The result: smaller U.S. ports are losing business, and importers are leaning heavily on supply chain financing to ride out the volatility.

Shippers Bypass Smaller Ports to Beat Tariff Clock

From the Gulf Coast to the West Coast, secondary ports are seeing volumes decline as importers race to front-load cargo ahead of steep tariff hikes. Ports such as Oakland, Jacksonville, and New Orleans have reported significant drops in traffic, a shift experts say is part of a broader market recalibration—not a seasonal lull.

“This is not a seasonal dip, but a market recalibration,” said Bryan Brandes, maritime director at the Port of Oakland.

Container data confirms the trend. While the Port of Los Angeles reported record container volume in June, secondary ports saw steep declines:

• New Orleans: –34.92%
• Seattle: –35.75%
• Tacoma: –36.01%
• Baltimore: –17.65%

Shippers are consolidating freight to fewer, larger ports to cut costs and reduce complexity as they navigate shifting trade policies. According to ITS Logistics, the move improves negotiating power and streamlines last-mile logistics.

Importers Shift to Off-Book Inventory and Supply Chain Financing

Facing tariff uncertainty and tighter margins, importers are turning to supply chain financing and vendor-managed inventory to maintain liquidity. Companies across sectors—including retail, healthcare, and automotive—are delaying payments and shifting inventory off their balance sheets.

“There is a lot of uncertainty, and if you are a distributor or manufacturer, there is a ton of pressure to push out payment terms,” said Jeremy Jansen, head of global supply chain and trade sales at Wells Fargo.

This strategy, which involves third parties financing or storing inventory until goods are needed, is becoming standard across industries exposed to overseas supply chains.

• Healthcare: Seeing a surge in financing interest amid threat of sector-specific tariffs.
• Automotive and Construction: Increasing use of vendor-managed inventory to preserve cash.

A Cautious Recovery and an Uneven Playing Field

While some recovery has occurred during tariff pauses, it remains uneven across sectors and geographies. Agricultural exports are recovering faster than manufactured goods, with countries like Vietnam and India gaining ground over China as sourcing destinations.

“Clients are remaining cautious and waiting for some measure of stabilization,” said Jonathan Heuser, head of trade finance at Citizens Bank.

Port officials warn that smaller gateways may continue to suffer long-term impacts if current strategies become permanent. Meanwhile, truckers face longer drayage routes as freight reroutes from familiar hubs, potentially increasing inland transport costs.

Source: CNBC 1 | 2