A surge in freight trucking activity, from the Texas-Mexico border to the warehouses and distribution centers of major U.S. retailers, shows the extent to which U.S. companies have rushed to move more imports into the country ahead of President Donald Trump’s reciprocal tariffs, which Trump laid out on Wednesday afternoon from the Rose Garden, trade taxes that will hit international partners “immediately,” according to the White House.
But all of that frontloading of imports into the U.S. economy also corresponds to a more concerning trend in the trade data that is now taking shape: a steep decline in new freight order activity in every region across the U.S., and a steep quarterly decline in Chinese freight volumes, as uncertainty about consumer demand spreads. The tariff rates disclosed on Wednesday were much higher than expected for many nations, with an additional reciprocal tariff rate for China at 34% sending the markets lower.
Data shared with CNBC by supply chain research firm Motive shows a significant surge in trucking activity at the Port of Laredo, the busiest land port in the U.S., with a 48.5% year-over-year increase that hit peak levels as of March 31.
Trucking visits to North American distribution facilities for the top five retailers, meanwhile, just hit “unprecedented” levels, according to Hamish Woodrow, head of strategic analytics at Motive. “Last week marked the highest activity levels recorded,” he wrote in an email. “This unprecedented influx mirrors the heightened activity typically seen during the holiday season, suggesting that businesses are accelerating shipments in anticipation of impending tariffs.”
Woodrow said with the tariffs expected to be in force immediately, “we expect to see a drop as early as the next two weeks. There may be some lag as shipments that didn’t make the deadline still get shipped, but now that the tariffs are in effect we’d expect the imports to drop in Q2 as companies adopt a cautious ‘wait and see’ approach, minimizing imports until there is more stability and clarity in trade policies,” he wrote.
Similar surges in freight volumes and spot rates were seen in February and March on cross-border lanes from Canada to the U.S., according to Paul Brashier, vice president of global supply chain at ITS Logistics. Volumes from the Toronto market to the Chicago market were up over 50%, and rates are up around 10%, with critical expedited shipments 50% higher in some cases. Brashier added that there have been many cases of truck drivers paid to run empty from the U.S. to get back in position to meet surging demand out of Canada into the U.S.
European pharmaceutical companies have been moving more key high-priced drugs into North America through air freight. Though with an average trade cycle of five to six days versus weeks to months for ocean freight, that activity is more muted.
“There was some pulling forward of larger shipments of higher-value pharmaceuticals out of Ireland, Germany, Switzerland because a tariff would have a material impact on consumers,” said Sebastien Podgorski, vice president of airline solutions at Freightos. “Any generics out of India and China we have not seen such movement mostly because they are lower priced goods and tariffs would have a marginal impact.”
Podgorski said insurers and large hospital groups typically negotiate pricing for six months at a time so there won’t be much of an impact in the short-medium term. But consumers who are buying prescription or over-the-counter medications may feel the impact within weeks because pharmacies usually procure at market pricing.
