Eighteen months of escalating tariff turmoil have pushed companies to make significant changes to sourcing, manufacturing footprints and distribution networks — but not to abandon the Asia–North America and Asia–Europe corridors that still anchor global trade.

Eric Fullerton, VP of Data Insights at supply chain visibility platform project44, said the shift is structural rather than tactical. "Tariffs have been part of the equation since back in 2018, but over the past eighteen months, as tariff turmoil has increased, companies have responded by making significant adjustments to network, sourcing, and production decisions as a result," he stated. "The clearest signals: a broader mix of suppliers, changes in manufacturing footprint, new distribution strategies, and carrier networks adapting to different trade patterns."

What is actually changing in trade flows?

The dominant lanes are not disappearing. Instead, the countries supplying them are changing. Thailand, Vietnam and Cambodia have taken a greater share of Asia–US flows as companies manage tariff exposure involving China — cargo stays in the same broad trade lane while its origin shifts materially.

Fullerton argues the economics still favour a distributed network over a wholesale shift out of Asia. "Even companies participating in nearshoring, say a North America company setting up factories in Mexico, elsewhere in Latin America, or within the United States, are usually doing it for specific products or materials, not comprehensively. The goal is redundancy, flexibility, and optionality," he outlined.

Asia's hold on production runs deeper than factory-gate pricing. Supplier ecosystems, labour availability, infrastructure, connectivity and scale are difficult to recreate elsewhere, giving companies strong reasons to keep established corridors while adding alternatives. For supply-chain planners, redundancy is increasingly an objective in its own right.

A company does not need to build a new factory to change its logistics footprint. Switching suppliers, gateways, consolidation points or transportation providers can redirect substantial volumes.

Cargo flows are also becoming less steady. Volumes may surge ahead of a policy change and weaken afterwards, creating operational peaks that ports, carriers and inland networks struggle to absorb efficiently.

Where do the hidden costs land?

Fragmented sourcing carries a price that factory-gate savings can obscure. Smaller consignments across more origins mean weaker consolidation economics and lower container utilisation. Longer or less predictable lead times force changes in inventory policy.

Fullerton identified three cost centres. "The hidden costs tend to show up in three places: inventory carrying costs, warehouse reconfiguration, and the administrative overhead of managing a more fragmented supplier base," he said. "Diversifying suppliers to reduce concentration risk sounds simple. It isn't. A sourcing decision that looks cheaper at the factory can look very different once you account for the full logistics and inventory picture."

The post-pandemic instinct to rebuild large safety stocks is largely gone. Companies instead want to selectively position inventory to protect vulnerable parts of the network.

"Most companies want to operate a leaner, more dynamic supply chain, reduce cash on hand, and put that capital back on the balance sheet. Covid-19 fundamentally changed that thinking, and for good reason, it created real fear around stockouts and disappointing customers. The goal isn't building larger buffers everywhere; it's being able to reposition inventory and adjust transportation plans as conditions change," Fullerton explained.

That puts pressure on warehouses and distribution systems to become more responsive rather than simply larger. Regional stock, transload capability and inland distribution gain value where they let businesses absorb uncertainty without permanently carrying excess inventory.

Why does infrastructure lag the cargo shift?

Freight can change direction quickly. Ports, warehouses, terminals and inland connections cannot — these are capital-intensive assets with lifespans measured in decades. A sustained change in cargo origins can leave infrastructure mismatched to the trade it was built to serve, and alternative gateways that initially absorb diverted volumes can hit congestion when cargo arrives faster than capacity expands.

"Infrastructure moves much slower than freight, and that mismatch is the real story here. A port, warehouse cluster, or inland network built around one set of origins and volumes can't just relocate when cargo shifts elsewhere. The immediate effect shows up at the receiving end," Fullerton said.

That leaves infrastructure investors with a hard call: distinguish a temporary diversion from a durable trade-flow change. Overreacting to a short-lived shift creates excess capacity; under-investing when a new pattern becomes entrenched creates years of congestion and higher logistics costs.

Ocean freight retains its central role — for many commodities, the economics make airfreight impossible. But where products carry high values, short shelf lives or severe penalties for delay, the total cost calculation can support selective airfreight or alternative inland routes.

Who pays in the end?

The cost of restructuring will be distributed across the supply chain. Companies with multiple suppliers and stronger negotiating positions can choose whether to absorb higher costs, push them to logistics providers or pass them to customers. Smaller businesses have considerably less room to manoeuvre.

Fullerton was blunt on the endpoint. "It always comes back to the consumer. The percentage passed through and how quickly it shows up on shelves will vary. But if it costs more to produce things, more to assemble them, and more to ship them, those things are going to cost more," he concluded.

The broader consequence: tariffs are no longer just changing the price of trade — they are changing the assumptions behind network design, from where inventory sits and how many suppliers are needed, to which gateways matter and how fast companies must react. As tariff volatility persists, the shippers best placed to absorb it will be those with real-time data on inventory at rest and in motion, and the decision speed to act on it.