As global trade policies and economic shifts continue, the warehouse and logistics industries are in the crosshairs of fluctuating import volumes. The Wall Street Journal article and video “Inside the West Coast Ports at the Epicenter of Trump’s Trade Tariffs” by Elise Dean addresses how trade tariffs and shifting import patterns impact the supply chain. The Los Angeles and Long Beach ports, which handle nearly a third of all U.S. containerized cargo, have become ground zero for these challenges.
Recent import surges, driven by tariff fears and fluctuating demand, have resulted in a 12% increase in import container volumes compared to last year, signaling a difficult period ahead for warehouse operators. Additionally, demand for U.S. storage space has increased as companies stockpile inventory near consumers. Businesses must address overflow issues, optimize operations, and proactively manage workforce needs to remain competitive.
The situation is magnified by the “bullwhip effect,” a supply chain phenomenon where small changes in consumer demand ripple through the supply chain, leading to overstocked warehouses or insufficient inventory. Warehouses that lack the proper management strategies risk being overwhelmed by surging inbound shipments and shrinking space availability.
The Current State of Import Surges
The U.S. tariff environment has prompted retailers and manufacturers to accelerate shipments, leading to an initial import surge. While March data showed a slight slowdown, with import volumes at major ports dropping 2% from February, the overall trend has been one of heightened activity.
The slight slowdown follows months of stockpiling as businesses rushed to bring in goods ahead of potential tariff hikes. Despite the dip, industry experts warn that challenges remain. Gene Seroka, Executive Director of the Port of Los Angeles, predicts a 10% decline in cargo volumes in the year’s second half. However, this forecast doesn’t account for seasonal spikes or market shifts, which could reignite volume surges.
Seasonal trends, such as back-to-school shopping or holiday preparations, often lead to higher import volumes, putting additional strain on warehouse operations. Businesses that fail to anticipate the volume variability risk operational bottlenecks and inefficiencies.
The Bullwhip Effect
The bullwhip describes a scenario where small changes in demand at the retail level cause increasingly significant shifts throughout the supply chain. For warehouses, this effect is especially disruptive, leading to the following:
- Over-ordering: Retailers may panic and overstock inventory, leading to space shortages.
- Demand misalignment: Warehouses may overestimate product movement, causing bottlenecks in operations.
- Cost escalations: Increased storage fees and labor costs strain already tight margins.
Recent tariff changes have amplified these effects. Importers rushing to avoid higher tariffs created container volume spikes, often followed by slowdowns as businesses adjust. Warehouses need real-time visibility and adaptive workforce strategies to mitigate these issues effectively.
Overflow Challenges: Are Warehouses Prepared?
Warehouse overflow can occur rapidly during periods of high import activity. With goods piling up, facilities may be out of space, creating bottlenecks and operational delays. Overflow affects warehouse efficiency and has a ripple effect on the broader supply chain. These risks can include:
- Increased labor costs from rushed operations.
- Delayed order fulfillment and dissatisfied customers.
- Strain on workforce morale due to erratic workloads.
It is reported that companies such as Amazon, Home Depot, and FedEx have been rerouting shipments and utilizing overflow storage to counteract the uncertainties surrounding the new tariffs. The pivot is feeding into a growing demand for warehousing capacity, even though as of now vacancy rates in 2025 Q1 were 7% compared to 3% in late 2022.
While this can appear as a relief for space-starved warehouses, businesses must still be aware of rising rents and constrained new construction. Proactively preparing for these import surges is crucial. Warehouses must implement strategies that balance short-term needs with long-term sustainability.
Workforce Management: Handling Surges
A flexible, well-prepared workforce is necessary for navigating the unpredictable demands of import surges. Labor shortages and turnover can exacerbate challenges, making the warehouse and logistic industry reassess their workforce management strategies.
1. Forecast Demand with Data-Driven Insights
Accurate forecasting is the foundation of effective warehouse management. By analyzing historical data and leveraging predictive analytics, businesses can better anticipate import surges and prepare accordingly. Factors to consider include seasonal trends in shipping volume, expected lead times from major suppliers, and historical data on peak and lull periods.
By understanding these trends, warehouses can effectively plan staffing, storage allocation, and resource deployment.
2. Optimized Space Utilization
During import surges, maximizing available warehouse space is essential. Implementing space optimization strategies can help facilities manage higher volumes without sacrificing efficiency. Some best practices that businesses can execute include high-density racking systems to maximize the floor-to-ceiling space, redesigning layouts to reduce wasted space and improve workflow, and collaborating with nearby facilities to manage temporary storage needs during high volume.
Efficient space utilization not only improves operations but also reduces the risk of disruptions caused by overflow.
3. Automate Inventory Management
Automation reduces the risk of human error and increases efficiency, especially during high-volume periods. Automated systems can track inventory levels in real time, simplify the picking and packing process, and improve accuracy in order fulfillment.
By reducing manual tasks, automation frees workers to focus on high-priority activities, boosting overall productivity.
Building a Flexible Workforce
Traditional workforce models often rely on fixed schedules and limited adaptability. However, the modern workforce demands a more flexible approach. Platforms like ShiftSwap™ allow operations to:
- Offer schedule flexibility: Attract a diverse pool of workers by accommodating modern work preferences. Assign shifts dynamically based on workload, ensuring optimal staffing during peak times.
- Improve communication: Ensure seamless coordination between management and staff, reducing scheduling conflicts.
- Reduce turnover: Create a supportive environment that increases employee satisfaction and retention.
Efficient workforce management is just as critical as space planning. By integrating ShiftSwap™ into their operations, warehouses can manage their workforce more effectively, improving retention and productivity.
Preparing for the Long-Term
Warehouses must recognize that the current trade environment is far from stable. Tariffs, consumer demand shifts, and the bullwhip effect create an unpredictable landscape. The key to success lies in proactive management, including:
- Diversifying supplier networks: Reduce dependency on regions impacted by tariffs.
- Strengthening logistics partnerships: Collaborate with carriers and freight forwarders to navigate disruptions.
- Investing in resilient infrastructure: Build facilities and systems that can easily handle future surges.
When import activities slow, the consequences extend beyond operational inefficiencies. Dock workers, truck drivers, and warehouse employees may face reduced hours or layoffs. The trickle-down effects impact local economies, affecting small businesses and service industries that rely on the logistics sector.
Import surges and the bullwhip effect present challenges for U.S. logistics and warehousing, but they also offer opportunities to improve efficiency and resilience. The challenges facing warehouses today are a stark reminder of the need for proactive strategies.
Platforms like ShiftSwap™ provide tools for workforce management, reducing labor costs, and staying competitive in an ever-changing supply chain landscape. Don’t let import surges disrupt your operations; start planning for success today.
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