This week:
- US Supreme Court approves Trump admin petition on reciprocal tariffs, will hear case in November
- US retailers increase import forecast, but still expect a sharp year-over-year decline in Q4 2025
- Experts expect US trucking overcapacity to keep pricing power in the hands of shippers until 2027
- Drop-off in August shipments may force LTL carriers to relent on the industry’s pricing discipline
Supreme Court Agrees to Hear Trump Reciprocal Tariff Case in November
The Supreme Court of the United States agreed last week to hear a case on the legality of President Donald Trump’s reciprocal tariffs. The stage is now set for a high-stakes showdown over the President’s ability to impose import duties without approval from Congress. If the administration loses the case, it could potentially have to refund billions in collected tariffs to the US importers who paid.
The court set a deadline of this Friday, September 19, for opening briefs, with responses due on October 20. The case itself will be heard sometime during the first week of November.
Claiming authority under the International Emergency Economic Powers Act (IEEPA), Trump first announced the reciprocal tariff policy in April. The President says the import duties will neutralize global trade imbalances and promote domestic manufacturing.
However, five small businesses and twelve states soon filed suit against Trump. These cases were consolidated at the US Court of International Trade as VOS Selections, Inc. v. Trump. In May, that court found that IEEPA does not grant the President the authority to impose tariffs without Congressional approval. On August 29, the Court of Appeals for the Federal Circuit upheld that ruling.
Both lower courts stayed their decisions, effectively allowing the Trump administration to keep levying the reciprocal tariffs while the case worked its way up to the Supreme Court. The White House, led by Solicitor General John Sauer, submitted a petition on September 3, requesting that the nation’s highest court hear the case.
Both the administration and the businesses suing have pressed for a quick resolution. The White House argues that the legal uncertainty is damaging sensitive trade negotiations. In a brief, Sauer said the lower court’s “erroneous decision has…cast a pall of legal uncertainty” over the President’s foreign policy efforts. In their own filing, the small businesses say that the “unlawful tariffs are inflicting profound harms” on their operations through price hikes and supply chain disruptions.
US Retailers Increase Import Forecast, But Still Expect Sharp Decline in Q4
US retailers are bringing in more goods than projected just a month ago. However, import volumes are still on track for a significant decline in Q4 compared to the same period last year, according to a recent analysis of industry data by the Journal of Commerce (JoC).
The latest Global Port Tracker (GPT) report from the National Retail Federation (NRF) and Hackett Associates shows that inbound container volumes for September are now expected to fall 6.8% year-over-year. This is a sharp improvement from the 19.4% drop forecast a month ago, representing about 300,000 additional TEUs of cargo.
According to the JoC, the volatile import patterns are due in large part to retailers frontloading stock for months to get ahead of the implementation of US reciprocal tariffs. Another import surge of holiday and peak season merchandise caused a massive spike in July, but experts expect a slowdown for the remainder of the year.
The GPT report projects significant year-over-year declines for Q4, with about 420,000 fewer TEUs expected in November and 430,000 fewer in December compared to 2024.
“Retailers have stocked up as much as they can ahead of tariff increases,” said Jonathan Gold, NRF VP for supply chain and customs policy. “But the uncertainty of US trade policy is making it impossible to make the long-term plans that are critical to future business success.”
Writing for the JoC, Laura Robb and Bill Mongelluzzo said the year-over-year declines appear steeper because retailers went on a frontloading spree last fall before potential labor strikes on the US East and Gulf Coast ports.
Now, many retailers are keeping inventories lean, holding about 1.3 months of stock on hand, according to the US Census Bureau. A logistics consultant told the JoC that importers “are very cautious about holding on to inventory because of the tariffs,” especially as demand has softened in some sectors.
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Shippers to Retain Pricing Power as Trucking Overcapacity Lingers Until 2027
An abundance of trucking capacity that has given shippers the upper hand on pricing is expected to persist until at least 2027, according to a new forecast from FTR Transportation Intelligence.
In a report about the newly released data, JoC Senior Editor William B. Cassidy said that the oversupply is primarily due to the large number of small trucking companies that entered the market during the pandemic era and have remained in business despite several years of low freight demand.
Despite some notable carrier shutdowns, “we still have this real large overhang of very small carriers that for whatever reason is not exiting the market,” Avery Vise, FTR’s vice president of trucking, during a presentation at last week’s FTR Transportation Conference.
As of August, the number of drivers at fleets with one to five trucks was still 39% higher than pre-pandemic levels in March 2020, according to data from the federal government..
With the market saturated, FTR does not foresee a significant rate recovery for trucking companies. The research firm forecasts that contract rates will gain a modest 1.5% in 2025 and 1.2% in 2026. Vise noted the recovery will likely “inch along, falling below the levels of inflation.”
A key industry indicator, active truck utilization, has hovered between 92% and 94% since 2024, a level that FTR does not expect to rise “to any significant degree” until 2027. From a carrier’s perspective, Vise said, “that means a lot more focus on cutting costs and getting much more productivity out of everything.”
Falling US LTL Shipments in August May Pressure Carriers to Lower Rates
Several of the largest US less-than-truckload (LTL) carriers saw daily shipment volumes fall in August. In a separate report in the JoC, Cassidy says this is a sign of persistent soft freight demand that is placing pressure on LTL rates and testing the industry’s long-held pricing discipline.
Financial updates released over the past week showed daily shipment counts dropped 8.2% year-over-year at Old Dominion Freight Line (ODFL), 3.4% at XPO, and 2.2% at Saia. The declines came despite a reported surge in manufacturing output during the month. According to Cassidy, this indicates a disconnect between economic indicators and actual freight activity on the ground.
Bucking the trend, ABF Freight System reported Monday that its shipment count rose 5% year-over-year in August as it focused on adding new “core LTL business,” according to a company filing.
The continued softness in the LTL could open new opportunities for shippers to secure cost savings, or at least hold price increases to a minimum during contract renewals, Cassidy said. Some industry sources report that the pricing discipline that the LTL industry is known for is beginning to wane as carriers compete for a limited amount of freight.
“Some LTL carriers are becoming ‘super aggressive,’” said Mike Regan, chief of relationship development at TranzAct Technologies, a freight procurement firm. He recounted a conversation with an LTL CEO who told him, “‘We’re going to price to get our trucks full, then we’ll go back to the (rates) we want.’”
However, there is little evidence of a widespread price war. ODFL, for example, saw its revenue per hundredweight — a key pricing metric excluding fuel surcharges — rise 4.5% in August. Overall LTL costs for shippers also remain elevated, with the Producer Price Index for the sector up 7.3% year-over-year in July.
