Cross-border freight takes biggest hit since pandemic

Cross-border trucking faced its biggest drop since the pandemic in April as global tariffs began and the trade war with China peaked.

The Bureau of Transportation Statistics reports a 9% drop in truck freight across borders in April. This is the first year-to-year decrease since last June and the largest decline since June 2020. Back then, North American truck freight fell by 14% due to the COVID-19 pandemic.

Typically, cross-border freight declines in April. This year, the decline of 12% is the steepest since April 2020, which saw a record drop of 38.5% due to the pandemic. Excluding 2020, April’s loss is the largest since December 2018, when freight dropped by 12%.

A sharp decline in freight between Mexico and Canada coincides with President Trump’s global tariffs and the escalating trade war with China. Cross-border truck freight surged in January as businesses stocked up in anticipation of the tariffs. North American freight also saw a boost in March after Trump delayed tariffs on Canadian and Mexican goods for 30 days.

In April, Trump announced 10% tariffs on all countries and higher reciprocal tariffs for some. Reciprocal tariffs were paused for 90 days soon after. A 25% tax on automobiles took effect on April 3. By April 10, a trade war led to 145% tariffs on China.

Freight Transportation Research Associates’ (FTR) April Trucking Conditions Index fell back into negative territory. This came after a brief stint in positive territory in March. Looking at volumes, rates, fleet capacity, fuel prices and financing, a negative score indicates pessimistic conditions.

Avery Vise, FTR’s vice president of trucking, noted that the Trucking Conditions Index showed neutral conditions from February to April. However, he stated that tariffs and efforts to address them “have distorted freight market dynamics.”

“As we finalize data for May and beyond, those factors and swings in diesel prices are likely to expose the true instability in the freight market,” Vise said in a statement.

According to ACT Research, Class 8 truck orders have been plummeting. April orders reached levels not seen since the pandemic began.

“Between the end of the industry’s annual ‘order season’ and the uncertainty surrounding the impact of US economic policy that peaked at the start of the month on ‘Liberation Day,’ April delivered the weakest cumulative MD and HD order tally since the beginning of the pandemic when markets were comparably unsettled,” Ken Vieth, president & senior analyst at ACT Research, said in a statement.

Canadian trucking freight fell by 16%, while Mexican freight declined by 3.5%. Mexico’s drop was softened by an increase in computer-related imports, which have dominated North American freight for a year.

Overall, cross-border freight took a significant hit in April. All modes, except airfreight (up 4%), saw reduced freight. Vessel freight experienced the largest decline at 25%.

On Friday, June 27, Trump said that he does not plan to extend the pause on the global and reciprocal tariffs. LL