February spot market data has revealed the impact just the threat of U.S.-imposed tariffs has had on cross-border freight, as well as the immediate aftermath.
“Starting in February, there was a huge spike in spot truckload volumes and rates from Canada as shippers looked for trucks to move goods across the border ahead of any tariff policy changes,” noted Ken Adamo, DAT Freight & Analytics’ chief of analytics.
“As the timing, the goods involved, and the posture of both countries have become clearer, truckload rates and volumes reverted to below their long-term averages. This has been a sharp correction in demand.”
After a surge in spot market cross-border loads, and an accompanying spike in rates, dry van linehaul rates from Toronto on cross-border lanes from 250-750 miles (400-1,200 km) averaged 18 cents less than their seven-year averages and have fallen $1 a mile (excl. fuel surcharge) since March 1, Adamo added.
In a March 13 post on X (formerly Twitter), Adamo posted, alluding to the above chart: “I hate sensational analytics more than just about anyone, but I think it’s safe to say that Canadian cross-border rates and volumes are in complete freefall.”
Canadian spot market sees February spike
Canadian spot market activity also saw a pre-tariff bump in February. Loadlink Technologies reported spot market volumes jumped 25% in February from the previous month, and were up 58% year over year.
February saw daily load volumes not seen since the Q1 2022. And it was the cross-border segment that drove those gains, with inbound loads from the U.S. up 64% year over year, and southbound loads to the U.S. up 79%.
“Economic uncertainty is a continuing theme this month with the volatile trade partnership currently happening in North America with Canada, the U.S., Mexico and China all set to experience the largest potential impact,” Loadlink Technologies said in a release.
“Carriers can continue to reap the benefits of a strong carrier-centric spot market as less equipment availability may drive rates up in the short term until concrete decisions on tariffs are made. To foster stronger intra-Canadian trade and reduce reliance on our cross-border partner(s), Canada’s First Ministers recently convened to discuss eliminating internal trade barriers. This initiative seeks to bolster Canada’s domestic economy by reducing interprovincial trade obstacles and enhancing labor mobility, thereby mitigating the impact of U.S. tariffs.”
Fleet experience
Speaking to analysts on an earnings conference call earlier this week, Titanium Transportation CEO Ted Daniel said shippers are not making major changes to their supply chains in the face of the looming tariff threat.
“Customers are just dealing with the situation,” he said of feedback he’s received from shippers. “The feedback we’re getting from most of our customers is, it’s business as usual. If they have to adjust their pricing a little bit, they’re going to adjust their pricing. It’s just going to be another increase to inputs.”
However, he added there may be changes to the way freight flows in the coming weeks and months as the trade war plays out.
“Freight will continue to move on trucks, but the directions may change. We are already established and equipped to execute responsibly and effectively in both segments [U.S. and Canada]. In other words, maybe a little less north-south and a little more movement east-west,” Daniel said.
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