Private Fleets Adapt to Tariff-Driven Volatility
[Stay on top of transportation news: .]
Private trucking fleets serving many sectors of the economy have been operating in a highly uncertain business environment this year as trade negotiations and higher tariffs have roiled supply chains.
But changing business conditions are nothing new, said Victoria Gutierrez, the senior vice president and chief merchandising officer at food distributor .
“It is always preferable to have a stable, more predictable market, but the reality is tariffs, inflation and occasional surprises have always been a part of doing business,” she said. “Size, scale and partnerships allow Sysco to navigate evolving and rapidly changing markets in a manner that provides customers a quality, diverse assortment of products at value.”
Gutierrez said 90% of Sysco’s product assortment is locally sourced, and it looks for ways to increase its pool of domestic suppliers.
Diversifying its supply chain in response to the pandemic at the beginning of this decade has helped the business respond quickly to changing circumstances, and it continues to look for alternative sourcing locations.
“Many of the supply chain changes we made during COVID proved to make us more resilient and flexible as a company, and we have continued to seek out more suppliers in more places, and, where practical and possible, to bring supply chains Âcloser to home,” she said. “That work will Âlikely continue.”
Sysco ranks No. 3 on the 2025 Transport Topics Top 100 list of the largest private carriers in North America.
The second Trump administration has enacted a range of frequently fluctuating tariffs on imported goods this year in an effort to bolster domestic manufacturing and has announced a series of new international trade agreements.
Ěý
See the 2025 Top 100 rankings
â–şShippers Pause Fleet Expansion
â–şSector Lists Reflect Uncertainty
â–şFleets Invest in Sustainability
Ěý
Sector Rankings
Food Service | GroceryĚý|ĚýBeverageĚý
Petroleum/ChemicalĚý|ĚýIndustrial Gases
Wholesale/RetailĚý|ĚýManufacturing
Equipment RentalĚý|ĚýBuilding MaterialsĚý
Waste ManagementĚý|ĚýConstruction
Paper/Office ProductsĚý|ĚýHealth Care
Uniform RentalĚý|ĚýMedia & Entertainment
While the tariffs are not as high as previously threatened, they have increased significantly, said Bob Costello, chief economist and senior vice president for international trade and security at .
Before President Donald Trump’s inauguration on Jan. 20, the ÂUnited States’ average effective tariff rate worldwide was 2.4%. In late March through most of April, that rate reached 28%. As of July, it was about 13-13.5%. At one point, the administration raised tariffs on Chinese goods as high as 145%.
Costello said private fleets are being hit harder by the trade policies than for-hire fleets because they are not only transporters of freight but also importers that pay the tariffs.
Almost half of American imports are inputs to the manufacturing process. When those products increase in price, it affects the manufacturer’s bottom line and makes it less competitive.
Costello said the costs of tariffs far outweigh the benefits. While international trade has hurt some individuals, households also have benefited from lower prices. He recently bought a pair of shoes made in Vietnam. If those shoes were made domestically, the price would remain the same only if American workers earned Vietnamese wages. The alternatives would be for consumers to pay much more for the shoes, or for manufacturers to automate. If the latter, the shoes would still be more expensive, and not that many jobs would be created.
Furthermore, tariffs quickly bring increased prices, but the benefits of bringing manufacturing back home don’t appear for a long time. It takes years to build a new auto plant, for example. Altering a supply chain is not an overnight decision. Mexico may be a cheaper place to do business than the United States and Canada, but Asian countries are cheaper.
“It is not free and fair with every country we trade with,” CosÂtello said. “However, tariffs are not precision instruments. They are not a scalpel. They are a blunt tool, and therefore you don’t always get the outcome you want from these tariffs.”
A containership at the Port of Long Beach. (Tim Rue/Bloomberg News)
The lack of clarity has made supply chain professionals uncertain as to their levels of investment and projected future growth, said Anne Reinke, CEO of .
Shippers and private fleet operators have tried to time the market. Companies rushed to purchase goods and increase their inventories before the tariffs took effect. Reinke cited a big jump in intermodal volume internationally and to a lesser extent domestically in the first quarter.
This year’s events have echoed some of the challenges brought on by the pandemic five years ago, when companies placed a renewed emphasis on building inventories rather than relying entirely on the just-in-time philosophy. Likewise, companies acknowledged the need for sufficient staffing.
A Soft Freight Market
Avery Vise, vice president of trucking for economic forecasting firm , said broader economic Âissues will have a bigger impact than tariffs. He referenced the recently passed One Big Beautiful Bill Act and the Trump administration’s regulatory relief steps.
Vise noted that the freight recession has been ongoing for three years. Freight demand is weak and won’t be going up soon. Consumption is flat, and industrial production is sluggish. Americans already stocked up on durable goods during 2020-21 and they aren’t buying houses, which often lead to other purchases. Retail sales have increased, but much of that has been in computers, digital downloads and pharmaceuticals — items that have relatively little freight impact.
Meanwhile, there’s still an oversupply of trucking capacity. Some small for-hire carriers are still operating because their lenders don’t want to foreclose on their aging equipment.
“We do not even have sort of the beginnings of a recovery for Âhigher freight rates until really next year,” Vise predicted. “We have them firming, sort of settling, but nothing in terms of any kind of rate inflation, and even then, it’s pretty mild.”
FTR does expect some downward pressure with tariffs in the 15% range as opposed to 2%. Near term, tariffs will have a negative impact, but not as much as previously thought. Eventually, they may become a positive for private carriers in some ways, he said.
Tariffs are not precision instruments...They are a blunt tool, and therefore you don’t always get the outcome you want from these tariffs.
Bob Costello, American Trucking Associations
Image
“There is certainly an argument to be made that tariffs will be a plus for private fleets by increasing the amount of U.S. sourcing,” Vise said. “I think at this point, it’s hard to make a case that that is a sure thing.”
The industry’s reaction to the tariff environment must be taken in the context of the recent past, he said. During the strong freight market of 2020-21, capacity was tight and rates were high, so shippers bought their own equipment so they could control their own destinies.
In the heavy-duty equipment market, there has been more growth in the private fleet sector than in the for-hire trucking sector. Fleets involved in retail trade between 2014 and 2024 grew their Class 7 and 8 driver population by 52%. Over that same period, for-hire trucking increased about 8%.
But truck orders have plummeted the past several months. April’s orders were the lowest since 2010, excluding the lockdown months of April and May of 2020.
Vise
Vise said 40% of Class 8 trucks bought in the United States are built in Mexico. Manufacturers will have to re-engineer their operations or pass along tariff costs. Moreover, parts imported from other countries for trucks built in the United States also are subject to tariffs.
Private fleets may start relying more on the for-hire market, Vise predicted. They have bulked up their operations with trucks bought in 2022 and 2023, which means some soon will need to be replaced. But with equipment prices rising, some private carriers may choose cheaper, readily available for-hire options.
Navigating Uncertainty
While fleets can’t ignore the challenges the uncertain tariff environment brings, they still must run their businesses.
Like Sysco, many private fleets and shippers are “rolling with the punches,” said Chris Caplice, chief scientist at DAT Freight & Analytics and founder and co- director of Massachusetts Institute of Technology’s FreightLab research initiative.
“I think if you ask most supply chain executives, this is another Tuesday, to be honest,” he said.
In a July report for DAT’s shipper customers, Caplice noted that Trump had announced about 20 significant tariff actions since his inauguration — one every nine days. Companies and consumers have become desensitized to the announcements and increasingly see them as negotiating tactics.
“The administration’s behavior over the last five months has suggested that unpredictability is a feature, not a bug, for their tariff approach,” he wrote.
Caplice said supply chain professionals did a lot of scenario planning to improve supply chain resilience during the pandemic. As a result, they don’t have to train for every outcome and can respond using muscle memory. Professionals remember the flexibility and mental preparation they had to have.
Want more news? Listen to today's daily briefing above or go here for more info
Transportation especially must take up the slack to handle volatility in manufacturing and supply and demand.
“Everyone in supply chain, this is why they’re there,” Caplice said. “They’re the shock absorbers.”
Caplice said manufacturers have shifted more of their operations to Mexico. Both major U.S. political parties generally agree that China isn’t the best trading partner, and tariffs have accelerated the shift away from it. But it’s difficult to fill all the manufacturÂing jobs, and companies generally don’t want to build products such as smartphones in the United States.
“There’s a dramatic move away from China as much as possible, but after 30 to 40 years of really creating the ecosystem there, it’s really hard,” Caplice said. “You know, if you do your manufacturing in Vietnam, you’re really just assembling Chinese-made product.”
He hasn’t seen long-lasting changes to supply chain operations as a result of the tariff policies, which have been in a state of almost constant flux.
“I have not witnessed anyone who’s making a long-term investment decision based on the tariffs that are being announced because they can be repealed the next day, like they have been,” Caplice said. “When you see this much uncertainty, it’s like poker. We’re hedging.”
