How Tariffs Are Quietly Crippling Freight Forwarders

The hidden toll of tariffs

We are Stella and Amy. We share firsthand stories at the crossroads of tech, business, and culture, helping leaders craft actionable cross-cultural strategies. Together, we bridge cultural divides and bring the world a little closer—one step at a time.

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Note: when you see🎙️, this is a quote from our podcast.

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In our latest Mandarin podcast (EP61), we spoke with David, Head of Sales at GoFreight—a vertical SaaS company building all-in-one tools for freight forwarders. If you’ve never thought much about freight forwarding, you’re not alone. It’s one of the most essential yet overlooked links in global trade. These professionals don’t just move goods—they race to find the fastest, most cost-effective routes to keep supply chains alive. With tariffs once again dominating headlines—especially in U.S.–China trade—we wanted to know: how are these policy shifts really affecting the people who make cross-border commerce possible?

Freight Forwarders: The Unsung Architects of Global Trade

Despite their central role in international shipping, freight forwarders often remain invisible. As David puts it, “You can think of them as travel agents for cargo.” They don’t own the ships or planes but coordinate every leg of the journey from origin to destination.

From choosing ocean carriers to handling customs documentation and organizing final delivery by rail or truck, freight forwarders are the glue holding a fragmented logistics system together. Many are small businesses—even solo operations—with razor-thin profit margins (5-7%).

These thin margins make freight forwarders particularly vulnerable to disruption—especially from unpredictable tariff policies.

The Real Stress Comes from Uncertainty

It’s not really the tariffs themselves that are stressful, but the chaos and unpredictability they bring.

🎙️ “Freight forwarders aren’t afraid of Trump raising tariffs, but they are afraid of an unpredictable Gemini.”

No offense to our Gemini readers, but the horoscope sign is known for mood swings and sudden reversals. When tariffs were announced and then reversed within 12 hours, some freight forwarders had already processed shipments and paid fees for cargo that ended up being unprofitable and unrecoverable.

This kind of policy whiplash paralyzes decision-making. Freight forwarders, who already juggle dozens of moving parts, find themselves caught in a “wait and see” limbo. Those heavily involved in China exports feel it most acutely, with some reporting that clients are delaying orders indefinitely, or slowing down orders just to buy time.

Killed Not by Tariffs, but by Cash Flow

While freight forwarders aren’t the ones paying tariffs directly, they often have to front the cash to customs in order to release shipments—putting huge pressure on their cash flow.

🎙️ “Tariffs are paid by the importers or exporters. Freight forwarders are just the pass-through party… But there are millions of dollars circulating through the freight forwarders' accounts. They don’t necessarily lose money, but their biggest challenge is managing cash flow.”

The financial risks grow even greater under Delivered Duty Paid (DDP) contracts, where the manufacturer promises to handle all logistics, including duties. In those cases, the freight forwarder must move money quickly or risk delays, penalties, or losing client trust.

So imagine: you’re a freight forwarder. You don’t pay the tariffs, but you must have enough cash to pay shippers upfront—before collecting final payment from the manufacturer or buyer. If tariffs suddenly disrupt that cash flow, you might be strangled financially, potentially leading to the end of your business.

The Dilemma: Be Conservative or Bold?

In response to this uncertainty, freight forwarders are taking different approaches. Some are hitting pause—freezing business expansion, delaying software upgrades, and reducing order volumes until trade tensions ease.

Others are going on the offensive to capture more market share.

🎙️ “In this industry, one importer or exporter often works with several freight forwarders. So now the bold forwarders can step up and win more market share.”

With multiple forwarders vying for the same clients, this moment presents a rare opportunity—whether by offering customized service, bearing more risk, or simply being faster and more responsive.

What Actually Strangles Freight Forwarders

We thought we understood tariffs—until our guest shattered that illusion. The real impact of tariffs on freight forwarders is far more indirect and severe than we had imagined. It’s easy to oversimplify how tariffs work, but who would have thought that freight forwarders, who don’t even pay the tariffs themselves, could face bankruptcy simply because of the cash flow strain tariffs create?

As global trade turns into a geopolitical battlefield, the real casualties often go unnoticed. While headlines scream about tariffs and politics, it’s the people behind the scenes—freight forwarders, small business owners, logistics workers—who quietly absorb the shock. These aren’t just policy shifts; they’re ripple effects that can wreck livelihoods. If we keep reducing complex economic realities to soundbites, we’ll miss the deeper story—and the human cost.

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