?? The Impact of the Trump Tariffs on Freight
Freight 360
A podcast all about having a conversation about the world of freight. Let's Talk Freight!
Good Morning,
For our latest content, we talked with Dean Croke from DAT about the new tariffs that went into effect and what they mean for the freight world?in a recent podcast episode. In today's?newsletter:
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TRUCKING
?? Trucking Stocks Slide, But Citi Sees Opportunity
Trucking stocks are taking a hit, but Citi’s analysts think the sell-off might be overblown. A new report suggests investors are reacting too harshly to plunging spot rates, missing key signals that could shape the industry’s next move.
?? Spot Rates Take a Dive
Truckload spot rates have erased their late-2024 gains, falling sharply in early 2025. While some decline was expected due to seasonality, the drop has been steeper than predicted—thanks to excess capacity and weak demand. FreightWaves’ Craig Fuller and Zach Strickland echoed these concerns on State of Freight, pointing to weather disruptions and policy uncertainty as added pressure.
?? Market Stabilization in Sight?
Despite the turbulence, Citi sees signs of a turnaround. Excess capacity is beginning to shrink—a recurring theme in the industry—but a full recovery isn’t guaranteed. Soft consumer spending and sluggish industrial output could keep rates suppressed longer than expected. While the freight recession is fading, a broader economic slowdown could put the brakes on recent progress.
?? Citi’s Moves: KNX Gets an Upgrade
Amid the volatility, Citi upgraded Knight-Swift Transportation (KNX) to Neutral. KNX had a rollercoaster start to 2025—up 11% early on before tumbling 20% from its January peak, including a 4% drop last Friday. Citi sees this as a sentiment-driven dip rather than a fundamental weakness. The stock now trades below Citi’s $53 price target, making the risk-reward profile more attractive.
?? Rail Picks: CP & CSX Stay Strong
Beyond trucking, Citi is bullish on rail, keeping Buy ratings on Canadian Pacific (CP) and CSX. CSX, despite some short-term headwinds, remains a long-term favorite due to its low valuation and expected 2026 gains. Both rail giants offer resilience against macro risks like tariffs, manufacturing slowdowns, and investment uncertainty.
???? Opportunity in the Chaos?
The bottom line: Citi sees trucking’s current struggles as a potential setup for stronger long-term opportunities. As weak carriers exit the market and capacity tightens, the industry could be primed for a rebound—just not overnight.
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What's going on this week?
? Diesel Prices Keep Dropping
For the second straight week, diesel prices took a dip, falling 5.3 cents to a national average of $3.582 per gallon, per the U.S. Energy Information Administration. Trucking’s primary fuel has now shed 11.5 cents in just two weeks, reversing a modest 3.7-cent climb seen through most of February. Compared to this time last year, diesel is now 42.2 cents cheaper per gallon—a welcome break for fleets battling tight margins.
Every region saw a price drop, with the Rocky Mountains leading the decline at 6.4 cents per gallon. The East Coast saw a more modest 4.3-cent dip, while New England barely budged, with just a 0.6-cent decrease. As fuel costs ease, the question is whether this downward trend sticks or if new market pressures send prices climbing again.
?? U.S. Chassis Makers Push for Tariffs
U.S. intermodal chassis manufacturers are once again calling for trade restrictions, accusing competitors in Mexico, Thailand, and Vietnam of selling chassis at unfairly low prices and benefiting from government subsidies. A coalition led by Stoughton Trailers and Cheetah Chassis Corp. filed a petition with the Department of Commerce and the U.S. International Trade Commission, seeking tariffs as high as 304.68% on Vietnamese imports. The group argues that these foreign suppliers, particularly those in Mexico, have ramped up shipments—totaling nearly $1 billion in 2024—while undercutting domestic production and hurting American jobs.
The petition faces pushback from industry players like CIE Manufacturing, which called the allegations baseless and warned that new tariffs could disrupt the supply of intermodal equipment. This isn’t the first battle—Commerce imposed 200% tariffs on Chinese chassis imports in 2021, and a similar probe in Canada is targeting Vietnamese exports. Now, all eyes are on U.S. regulators, with Commerce set to decide by March 18 whether to launch an official investigation. If it moves forward, the case could reshape the intermodal chassis market for years to come.
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?? Ocean Carriers Get Tough — But Can It Last?
Ocean carriers are shifting their mindset from chasing volume to protecting profits, tightening contract terms and cracking down on rate discounting. At the TPM 2025 conference, experts noted a "boardroom shift" where carriers now enforce stricter space allocations and push shippers toward higher spot rates. Strategies like blank sailings—where vessels skip port calls to maintain profitability—are becoming standard practice. Freight forwarders, especially smaller players, are feeling the squeeze as carriers prioritize direct relationships with large shippers. Meanwhile, geopolitical risks, including potential U.S. tariffs on China-built ships, could further disrupt trade flows.
Yet, despite carriers’ newfound discipline, market forces may derail their pricing power. The global shipping industry faces a supply glut, with container capacity projected to grow 4.7% in 2025—outpacing demand by three to four times. HSBC’s Parash Jain warned that the industry is heading into a “deeper down cycle,” with volatile market conditions persisting. With weak economic signals and ongoing geopolitical instability, the question remains: Can ocean carriers hold the line, or will the pressure to cut rates return?
?? Cargo Theft Soars, Industry Demands Action
Cargo theft is hitting record levels, costing supply chains up to $35 billion annually and pushing carriers and shippers to call for congressional intervention. At a Senate subcommittee hearing, industry leaders from BNSF, OOIDA, and Tanager Logistics warned that organized crime has become more sophisticated, using cyber fraud, identity theft, and double brokering schemes to intercept shipments. With cargo theft cases up 40% in 2024, small trucking businesses are especially vulnerable, and law enforcement struggles to keep up—only one in 10 cases results in an arrest. Without stronger enforcement, fraudsters are becoming bolder, putting additional strain on an already fragile supply chain.
To combat the crisis, industry leaders urged Congress to create a Federal Supply Chain Crime Coordination Center, increase penalties for cargo theft, and strengthen FMCSA’s vetting process for motor carriers. They also pushed for the Household Goods Shipping Consumer Protection Act, which would require brokers to register a physical address—something carriers already do—to curb fraud. Without swift action, stakeholders warn that cargo theft will continue to disrupt businesses, raise consumer prices, and force legitimate operators out of the market.
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Our Latest Podcast Episode????
Trump Tariffs & Cross-Border Freight (with Dean Croke of DAT) | Episode 284
Ben Kowalski and Dean Croke of DAT Freight and Analytics break down recent US-Canada tariff changes, covering their impact on freight volumes, rates, and carrier challenges. Dean shares insights on operating costs, a possible freight recession, and long-term trade policy effects. They also discuss market volatility, strategies for navigating tough conditions, and the importance of strong partnerships. The episode wraps up with predictions for future trends and advice on staying adaptable in a shifting market.
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