Cross-border calculus: North American freight networks adapt

Years of shifting tariffs, customs requirements and trade policies have forced shippers and their transportation providers to become more adaptable, but previous disruptions offer little guidance for what lies ahead, especially as uncertainty surrounding the U.S.-Mexico-Canada Agreement has increased. The U.S. declined to confirm a 16-year extension of USMCA on July 1, triggering annual reviews that could continue until the trilateral trade pact expires in 2036, adding more unknowns to an already challenging operating environment. “The best indication of future behavior isn’t past behavior where trade is concerned,” said Mark McKendry, president of IMC Logistics’ Canada business. “Because of the capricious nature of trade policy these days, I don’t believe anyone could predict what next month will look like.” Transportation providers are responding by creating optionality across modes, manufacturing networks, warehousing and customs services. The goal is to give customers multiple ways to keep freight moving when regulations, costs or capacity shift. Still, some companies hesitate to adjust operations because a new plan can become obsolete almost as soon as it is implemented. “Some of our customers got tariff fatigue the last time tariffs started changing at a rapid pace,” said George Chasteen, chief operating officer of Mesilla Valley Transportation. “By the time they implemented a new plan for an announced tariff, the plan was no longer relevant or valid due to a change in the tariff policy the following week or month.” Jonathan Starks, CEO of FTR Transportation Intelligence, said the policy environment has stabilized somewhat since last year, giving companies greater confidence in their decisions. Cross-border freight volumes…

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