This week:
- President Trump imposes 25% tariffs on all automobile imports; more new duties expected
- Port Authority CEO says Montreal labor dispute has damaged shipper confidence, calls for deal
- US LTL carriers expanding their networks despite uncharacteristically weak demand in Q1 2025
- Drayage capacity shrinking in the US due to loss of drivers, but it’s still enough to meet low demand
Trump Orders 25% Tariffs on Automobile Imports; More to Come This Week?
US President Donald Trump signed an executive order last Wednesday mandating 25% tariffs on all imported consumer automobiles. The new import duties go into effect on Tuesday of this week, April 2, the same day the Trump administration is expected to implement reciprocal tariffs on all US trading partners.
At a press briefing last week, Trump said about the executive order, “It goes into effect April 2. We start collecting on April 3.” The order applies tariffs to all imported sedans, SUVs, minivans, light-duty trucks, and other consumer vehicles.
A White House fact sheet supplied to the press clarified that automobile parts that fall under the United States-Mexico-Canada Agreement (USMCA) will not immediately be subject to tariffs. However, the executive order itself says USMCA-eligible parts will be tariffed by May 3.
Since starting his second term on January 20, Trump has made tariffs a central component of his international trade policy. In February, the President signed an executive order requiring all federal agencies to work on a report about international trade, due by April 2. Trump later said he would implement reciprocal tariffs on that day, effectively matching duties imposed on American exports by US trading partners.
A recent Wall Street Journal report suggested Trump may be rethinking the reciprocal tariff policy, but the President later disputed this claim. Speaking to reporters at the White House last week, Trump indicated the tariffs could be short-lived if the US can strike new deals with its trading partners.
“I’m certainly open to (negotiations) if we can do something,” Trump told reporters. “We’ll get something for it.”
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Port of Montreal Says Labor Dispute Must End to Rebuild Shipper Confidence
The Port of Montreal is hoping for a quick resolution to ongoing labor disputes, according to Port Authority CEO Julie Gascon. Montreal dockworkers have been operating without a contract since late 2023, resulting in multiple work stoppages that have impacted the port’s reliability.
Talks between the Maritime Employers Association and Local 375 of the Canadian Union of Public Employees have broken down several times, leading the Canada Industrial Relations Board (CIRB) to appoint a special mediator in November and order arbitration more recently. Gascon says it’s critical to reach a deal soon to restore shipper confidence in the port.
“Operational performance has suffered due to labor instability,” Gascon told the Journal of Commerce (JoC) last week. “We’ve lost volume because some cargo owners and shipping lines have lost confidence.”
Gascon also said the port needs labor stability for its new Contrecoeur container terminal to succeed. The Quebec government has provided significant funding for the project in the hopes of increasing Montreal’s capacity.
“Contrecoeur is now critical for Canada’s diversification efforts,” Gascon said. “If we don’t build this infrastructure, we won’t be ready when demand increases.”
US LTL Carriers Expand Networks Despite Soft Demand, Betting on Future Uptick
While demand in the US less-than-truckload (LTL) sector is currently down, many carriers are actively expanding their networks. Several LTL executives recently spoke to JoC Senior Editor William B. Cassidy about this trend.
According to Cassidy, LTL companies are now preparing for an upswing in freight demand, which they expect will arrive later in 2025. That forecast is partly driven by the current soft demand, which has led some execs to believe the LTL sector’s peak season is shifting.
Major LTL companies — including FedEx Freight, Old Dominion Freight Line, and XPO — reported declining shipments and tonnage for January and February. March numbers aren’t available yet, but most observers expect them to be down from previous years.
“For the first time in decades, we’re not seeing the traditional March peak for LTL,” Roadrunner CEO Chris Jamroz told the JoC last week. While Jamroz says it used to be that most carriers “could deliver a great result in LTL in March,” this year has proven different.
Still, LTL carriers remain optimistic, with many adding terminals and lanes in anticipation of a rebound in demand. For example, Roadrunner recently added 278 lanes, its largest expansion since 2021.
“We’re at the bottom of the trough, but we will go up, and we want to be positioned to respond to shippers very fast,” Jamroz said.
Despite Loss of Drivers, US Drayage Capacity Still High Relative to Demand
According to industry stakeholders, US drayage capacity is slowly shrinking from its high point in 2022 but is still more than enough to meet demand. With steady capacity and soft demand, rates remain low in the drayage sector.
Jason Hilsenbeck of LoadMatch.com and Drayage.com told the JoC last week that overall drayage capacity “has been pretty stable over the last year” despite a trend of drivers migrating to larger carriers.
The Intermodal Association of North America’s driver database reported approximately 489,000 US drayage drivers in January, a decline of about 8% over the last two years. Meanwhile, the number of Uniform Intermodal Interchange Agreement carriers is 61% higher than in late 2019, while the number of drivers has only increased by 3.4%, further indicating a labor shift toward larger carriers.
“Drivers, in general, are the commodity in trucking,” said Paul Brashier, VP of global supply chain for ITS Logistics, a provider of various drayage services. “They will migrate to the large carriers when the market is where it’s at now because the larger carriers can acquire business.”
Without an uptick in demand, the smaller carriers in the drayage sector “will struggle to keep their doors open and have a more difficult time acquiring or holding on to business,” Brashier said. However, other industry stakeholders see an opportunity in the present moment.
“I’ve seen a shift…to making drayage part of a broad supply chain solution,” Brian Kempisty, founder of drayage brokerage firm Port X Logistics, told the JoC. “I think we are hitting a better equilibrium of cost versus service.”
