The U.S. Freight Industry Prepares for a Surge Amid U.S.-China Trade Thaw

A 90-day trade thaw between Washington and Beijing could prove to be a welcome reprieve for the U.S. freight industry, as importers rush to lock in shipments ahead of the busy back-to-school period, experts said.

The $906 billion U.S. trucking industry has been facing a nearly three-year-long slowdown due to overcapacity, worsened by President Donald Trump’s recent tariffs on the country’s largest trading partners. However, an agreement on Monday between the world’s two largest economies to slash tariffs for at least 90 days has shifted expectations from fears of low freight activity to a potential import surge ahead of the peak shopping season starting late July.

While most transportation companies have lowered their earnings guidance due to tariffs and weak consumer sentiment, there is optimism that Q2 forecasts may be beatable following the trade thaw. German container shipping company Hapag-Lloyd reported a 50% increase in bookings for U.S.-China traffic, indicating a significant uptick in demand.

The expected surge in imports will increase demand for trucking and railroad capacity to move containers off ports and transport them inland. This boost in freight revenue could benefit carriers such as JB Hunt, Knight-Swift, Hub Group, Old Dominion, as well as railroads like Union Pacific and CSX.

The U.S. surface transport industry is seen as a reliable barometer for broader economic changes, and the current uptick in import activity could signal a positive shift in the economy. Small-to-medium retailers are rushing to move goods ahead of the back-to-school and retail season, putting pressure on manufacturers in China to produce quickly.

With the additional freight expected to hit U.S. West Coast ports by end-June, spot rates are likely to rise, especially during the peak produce shipping season. Industry experts advise importers to lock in capacity early to secure space and avoid potential rate hikes.

The U.S. freight industry is gearing up for a busy period following the U.S.-China trade thaw, with hopes of a surge in import activity and increased revenue for transportation companies. As the industry prepares for the peak shopping season, all eyes are on the impact of the trade agreement on freight volumes and rates.

(Reuters/Reporting by Abhinav Parmar in Bengaluru; editing by Arpan Varghese and Shinjini Ganguli)