What Do Tariffs Mean for Trucking and Freight Companies?

Tariffs on Canadian and Mexican imports proposed by the United States government and potential retaliatory tariffs by Canada and Mexico have many consumers and businesses concerned for the future. Many don’t know or understand how tariffs will impact day-to-day costs. Will prices for everyday items go up? Many businesses don’t know or understand how tariffs will affect their industries and many trucking companies are in the same boat. Will the tariffs lead to a decrease in shipping? What do tariffs mean for trucking and freight companies?
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This quick overview may help answer some of your questions.

How Could Tariffs Affect Trucking and Freight?

Potential tariffs on imports can have a variety of effects on trucking companies, drivers, and freight companies that will depend on a number of factors. The specific impact will vary depending on the type of cargo these companies haul and where most of their freight is expected to be delivered. For example — if tariffs are imposed on imported steel, trucking companies that transport steel would most likely see a decrease in business, while those that transport domestically produced steel may see an increase in demand for those materials.

In general, the effects of the proposed tariffs on the trucking industry are expected to be less severe than those on retailers, manufacturers, and consumers. That does not mean that trucking and freight companies will not feel the impact of a 25% tariff on select goods and materials. Here is a quick glance at how the proposed tariffs could impact the trucking industry if they are put into effect. 

Increased Operational Costs

Tariffs can lead to increased operational costs for trucking and freight companies. In particular, industry experts believe that a 25% tariff on Mexican imports could lead to an increased price for Class 8 tractors for trucking companies. If tariffs are imposed on imported truck parts or the materials used for the manufacturing of trucks, the cost of purchasing new trucks or maintaining existing ones could increase and have a direct impact on trucking companies. In addition to increased equipment costs, higher freight costs may be necessary to balance increased manufacturing costs and maintain profitability.

Decreased Shipping Volume

The proposed tariffs may also lead to decreased shipping volume, particularly for companies that operate across the borders of the United States, Canada, and Mexico. If tariffs make imported goods more expensive, businesses may reduce their reliance on international sales, impacting freight volumes for trucking companies engaged in cross-border transport. Additionally, operations like cross-border dependent automotive manufacturing may be at a standstill, with many companies choosing to temporarily pause operations rather than risk losing profitability.

Increased Domestic Shipping

On the other side of the debate, tariffs could lead to an increase in domestic production in the United States, Canada, and Mexico. Tariffs have been used as an incentive in the past to increase domestic production and manufacturing. And as imported goods become more expensive, businesses may turn to domestic suppliers, potentially leading to an increase in domestic shipments versus international. This shift could benefit trucking companies focused on domestic routes.

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How Does a TMS Help Reduce Costs in Trucking?

If these proposed tariffs do go into effect, reducing costs whenever and wherever possible becomes even more important for trucking and freight companies. A Transportation Management System (TMS) can help trucking and freight businesses become more efficient and minimize expenses in a variety of ways:

• Route Optimization — Planning better, more efficient routes can reduce fuel consumption and mileage for trucking companies.
• Improved Load Planning — Reducing empty miles and maximizing the profitability of each truckload is vital. Improved LTL load planning is a benefit when you need to make every mile count.
• Streamlined Operations — A TMS can help eliminate manual processes and reduce administrative overhead with automated workflows.
• Carrier Management — A TMS can provide important data to help companies negotiate better rates with carriers and optimize carrier selection.
• Fuel Management — With the right features and integrations, a TMS can better track fuel consumption, identify fuel waste, and implement strategies to help save fuel.

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READ MORE: Top 5 Challenges Facing the Trucking Industry in 2025‍

Import tariffs can have a significant impact on the trucking and freight industry, affecting operational costs, shipping volumes, and domestic versus international trade. By having a better understanding of the potential impacts of these tariffs and knowing how to leverage tools like a TMS, trucking companies can quickly adapt to changing market conditions and maintain profitability.
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Contact TransPlus today for a demo of our TransPlus TMS and discover its key benefits!