weapons and armor do not count towards party speed, only trade goods. Some of the encumbering effects of trade goods can be counteracted by having spare horses in your inventory, where notionally they'll carry the trade goods for you.
Beside the slower party speed, inventory items limit the amount of gear you can salvage and then sell. It is generally recommended not to go hunting bandits while carrying a heavy load of trade goods. Weight accumulated from inventory items, particularly trade goods, can significantly slow your party down.
