This week:
- Trump pauses 25% tariffs on Canada and Mexico for products that fall under the USMCA
- US-Canada cross-border truckload freight volumes spike in response to potential tariffs
- Panelists at TPM25 warn US West Coast ports could lose business over rail dwell times
- Supply chain leaders speak to US Senate subcommittee about ongoing cargo theft crisis
Trump Pauses Tariffs on Canada and Mexico for USMCA Eligible Products
Following US President Donald Trump’s implementation of tariffs on imports from Canada and Mexico last Tuesday, March 4, the White House made several announcements that culminated in a pause on the new import duties until April 2.
Trump initially announced broad 25% tariffs on all products coming into the US from Canada and Mexico on February 4 but delayed them for one month. When the tariffs went into effect last Tuesday, Trump lowered the rate to 10% for Canadian energy imports. On Wednesday, March 5, the President made an exemption for automotive imports from both Canada and Mexico. Then on Thursday, he again paused the tariffs, as long as the imports comply with the United States-Mexico-Canada Agreement (USMCA).
Trump signed the USMCA into law during his first term in November 2018 and later approved a revision to the trade agreement in December 2019.
Multiple federal agencies are currently working on a report on American trade policies, which is due to the President by April 2. That’s the same day Trump now says the 25% tariffs on Canada and Mexico will go back into effect. The report is expected to make recommendations on Trump’s other proposed import duties, including reciprocal tariffs for all US trade partners.
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US-Canada Truckload Volumes, Pricing Surge Ahead of Potential Tariffs
Multiple supply chain observers say the prospect of Trump’s tariffs on Canada and any potential retaliatory measures are already impacting cross-border truckload volumes and pricing.
Writing for the Journal of Commerce (JoC), Senior Editor William B. Cassidy said US-Canada truckload volumes and spot rates have seen significant increases recently, indicating a scramble to move goods before tariffs can impact costs.
Data from DAT Freight & Analytics shows a sharp rise in activity for the week ending February 28. Dry-van spot market volumes from Toronto to Chicago jumped 57%, while rates on that route increased by 7%. Since the US presidential election in November, average spot rates for US-to-Canada shipments have climbed 18%, with a 6% increase in the past two weeks alone, reaching a two-year high. Similarly, Canadian spot rates for US-bound loads are up 7% since the election and 5% in the last two weeks.
Meanwhile, the spot market freight index from Loadlink, a DAT sister company, rose 40% in January from December and 13% year-over-year, strong indicators of an increase in volumes. At the same time, available Canadian spot truck capacity fell 29% year-over-year despite a slight monthly increase. In its most recent freight report, Loadlink attributed this flurry of activity to companies “getting ready for any future complications” that may come from tariffs.
US West Coast Ports Face Pressure Over “Excessive” Rail Dwell Times
At last week’s TPM25 conference, hosted by the JoC in Long Beach, California, a panel of industry experts discussed the recurring problem of “excessive” rail container dwell times at US West Coast ports. The panelists warned there is a risk of diverting critical cargo to East Coast ports if the delays continue.
Rail dwell times at the Port of Los Angeles during last year’s peak season — roughly August to October — averaged over ten days at five out of six terminals, with Yusen Terminals hitting a peak of 18.3 days in October.
“With 18- to 20-day dwell times, shippers have strong motivation to use East Coast ports, and rightfully so,” said Yusen CEO Alan McCorkle. He said that for West Coast ports to remain competitive, dwell times should top out at four to six days during peak periods. “We cannot tolerate these delays. If we don’t resolve this, cargo will move elsewhere,” McCorkle added.
In October, the Pacific Maritime Shipping Association (PMSA) reported peak average rail dwell times of 9.9 days across the Ports of Los Angeles and Long Beach. This is in sharp contrast with East Coast ports, where containers typically move to trains within three days.
Supply Chain Leaders Testify on Cargo Theft Crisis, Ask Congress for Help
Trucking, railroad, and shipping representatives sounded the alarm about the escalating crisis of cargo theft during a recent US Senate subcommittee hearing, urging lawmakers to take action. Citing staggering financial losses, the industry leaders also asked for stronger law enforcement efforts throughout US supply chains.
Representatives of multiple US companies testified about the impacts of cargo theft, a broad category that includes fraud and shipment interception, and which costs US supply chains up to $35 billion annually.
Highlighting the prevalence of freight fraud, Lewie Pugh, executive vice president of the Owner-Operator Independent Drivers Association, said, “Since I began my testimony, a small business trucker has likely fallen prey to fraud that could jeopardize their entire business.”
Robert Howell, Chief Supply Chain Officer at Academy Sports and Outdoors, said cargo thieves’ tactics are rapidly evolving and now include sophisticated cyber crimes. “In my 25 years in the supply chain, I’ve never seen cargo theft this prevalent,” he stated.
Witnesses urged Congress to address the lack of coordination and jurisdictional challenges that hinder cargo theft investigations. Will Johnson, Chief Special Agent at BNSF Railway Police Department, reported an estimated 65,000 thefts in 2024, a 40% increase from the previous year.
Johnson proposed several actions that Congress and federal agencies can take to help alleviate the cargo theft crisis, including establishing a supply chain crime coordination center and task force. He also asked Congress to allocate funding for federal prosecutors dedicated to cargo theft cases and to increase the penalties for those convicted of such crimes.
