Analysts: Tariffs To Extend Freight Recession

Double-digit tariffs on multiple international trading partners are expected to perpetuate the freight recession in the short term, analysts predict.

With 20-25% of surface for-hire freight shipments involving international products, researchers with ACT Research predict the administration’s tariff policies will “extend the for-hire freight recession.” However, as tariffs gradually translate into higher equipment costs for carriers and shippers, capacity will tighten enough to “help end the long for-hire freight recession,” according to the group’s Freight Forecast: Rate and Volume Outlook report.

“The trucking industry also faces considerable supply shocks related to new U.S. government policy,” ACT Research’s Tim Denoyer stated in a release. “Both equipment and labor supply are affected, and this is likely to press truckload rates up after tariffs take their toll.”

Denoyer noted that currently, “retail sales are still brisk as consumers snap up pre-tariff prices, but freight demand fundamentals face major self-inflicted tariff headwinds. The pre-tariff inventory stocking period will soon reverse, and consumption will fall as prices rise.”

“Freight is very much in the crosshairs of the trade war,” he concluded.