Uncertainties in Global Supply Chains Could Derail Freight Market Recovery in 2025

Tariff uncertainties continue to drive volatility in cross-border operations and drayage markets, according to ITS Logistics’ April ITS Supply Chain Report. Most major ports saw growth in import volumes through March as front-loaded inventory continued arriving in the United States.

Following the Trump Administration’s April 4 reciprocal tariffs announcement, however, global ocean container bookings dropped by 49%, priming the U.S. drayage market for a major cliff event.

The flatbed market also contracted after two months of growth due to shrinking demand in the manufacturing sector.

Warehousing continues to expand at a sluggish pace, with a notable month-over-month decline largely driven by pricing contractions in inventory, warehousing, and transportation sectors.

“The sudden announcement of tariffs has led to immediate disruptions,” says Josh Allen, chief commercial officer at ITS Logistics. “We’re seeing a widespread booking freeze across international freight as businesses hit the brakes mid-shipment cycle. Companies are trimming down purchases and moving just enough to keep the lights on—and who can blame them? Nobody wants to move product today that could be twice as expensive to land next week. The result is a ‘big freeze’ that’s slowly working its way inland and will create significant volatility for everyone.”

Key takeaways:

·      According to the report, dry van spot market volumes from Toronto to Chicago increased by 57% during the week ending Feb. 28, and rates in this cross-border lane rose by 7%, as shippers raced to move products ahead of tariffs.

·        Spot rates from the United States to Canada have, on average, increased by 18% since the U.S. election and by 6% in the last two weeks of March to their highest level in two years. With the Trump Administration’s 25% blanket tariffs on Canadian imports now in place, cross-border shipping volumes could face a sharp decline that threatens both U.S. and Canadian carriers.

·        The key industries affected by current and evolving tariff measures include the automotive sector, agriculture and food exports, and metals and manufacturing.

Automotive sector: Raw materials and components often cross the U.S.-Canada border — and incur tariffs — multiple times throughout the production process. As a result, vehicle costs are expected to increase by thousands of dollars, placing further downward pressure on consumer demand.

• Agriculture and food exports: China’s reciprocal tariffs on all U.S. imports, which increased to 125% as of April 12, threaten several U.S. agricultural exports, namely soybeans. China has already identified Brazil as an alternative supplier, and the shift away from U.S. markets could amplify long-term challenges faced by American farmers.
• Metals and manufacturing: Steel and aluminum tariffs are a significant concern, as they burden manufacturers who rely on raw materials and increase the prices of U.S. goods, making them less competitive globally. Analysts are concerned that the current tariffs risk raising costs for downstream industries that depend on these raw materials.

“Down-cycle markets are exhausting—for shippers, for carriers, for consumers,” adds Allen. “These tariffs are going to force some short-term chaos and push capacity out of the marketplace. Without movement, everyone stalls—shippers delay decisions, service providers struggle to survive, and the whole system drifts. But chaos forces companies to commit, plan, and compete.”