Trucking freight crossing the borders stabilized in June as uncertainty about tariffs cooled down a bit. Still, some freight economists’ predictions may not bode well for truckers.
According to the latest data from the Bureau of Transportation Statistics, cross-border trucking freight dropped moderately in June. This marked the third consecutive year-over-year decline.
Historically, freight tends to decrease in June in anticipation of peak season. This year’s seasonal drop is typical compared to volatility in the industry throughout much of the year caused by an erratic tariff policy.
Canadian freight was responsible for the net decrease. Trucking freight in and out of the northern border sank by 14%, led by plummeting activity with vehicle shipments. Meanwhile, Mexican freight jumped 6%. A surge in computer-related freight propped up imports out of Mexico, which has been the story for most of the year.
Although cross-border numbers suggest some stability, the picture is less clear when zooming in. According to Uber Freight’s latest monthly economic and market update, container import volume increased in June compared to May, which saw a large drop in volume.
Another round of frontloading imports may be behind some increased activity. In April, President Donald Trump paused tariffs for 90 days. With an early-July deadline, companies were incentivized to get ahead of anticipated price increases. Mazen Danaf, Uber Freight’s senior economist and applied scientist, suggested June’s import volumes may have been influenced by the trade policy.
“This likely reflects pre-stocking ahead of the tariff pause deadline but could also indicate a stabilization in the market after the U.S.-China tariff reduction agreement,” Danaf stated in the report.
According to the Yale Budget Lab, the average effective tariff rate is nearly 18%, the highest since 1934.
That’s up from 2.4% in January but down from the peak of 28% in April. In the short term, significant price increases may be seen in metals (41%), leather products (39%) and wearing apparel (37%). A lot of those prices have yet to be realized.
Uber Freight’s Q2 Market Update and Outlook notes that a 1% increase in the average tariff rate could decrease truckload demand by 0.15% to 0.25%. A rate of 18% could reduce demand by as much as 4%.
For the most part, the U.S. economy has been resilient amid the back-and-forth trade policy. Both employment and inflation have stabilized. However, uncertainty persists.
That uncertainty is reflected in Freight Transportation Research Associates’ (FTR) Trucking Conditions Index. In June, the index dropped to its lowest reading this year at -1.83 after reaching its strongest reading since October 2022 the previous month.
FTR’s index considers volumes, rates, fleet capacity, fuel prices and financing. A negative score indicates pessimistic conditions.
Avery Vise, FTR’s vice president of trucking, predicts a “modestly more favorable market” next year. For the remainder of this year, conditions may continue to be a little rough.
“So far, the economy is weathering tariffs and other stresses better than anticipated, and our latest freight outlook is not as weak as it was previously,” Vise said. “At least in the near term, though, we still believe forecast risks are weighted more to the downside than the upside.”
FTR’s outlook is consistent with the OOIDA Foundation’s July market update. The Foundation’s report notes that tariffs have slowed down dry van and reefer freight. Although manufacturing activity has increased, that could be short-lived as businesses get ahead of tariffs.
In June, Class 8 truck orders dropped 25% from May and 36% compared to June 2024. Less than 9,000 units were ordered, the lowest June tally since 2009 and well below the 10-year average of 19,213 units.
Dan Moyer, FTR’s commercial vehicles senior analyst, partially blamed tariffs for the slump. On June 4, the 25% steel and aluminum tariff was doubled to 50%, significantly raising production costs. Weak freight conditions and economic uncertainty also played a role in the order slowdown. LL
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