Freight market and tariffs, what will happen?

You could just rebuild the pieces. As needed.

 

Freight will go down. Walmart sells a microwave for 55. It costs at the port of China 25. The rest of shipping, stocking ect. So now it costs 80 at the 100% tarrif rate. I know it's 103%. So people now have 25 dollars less to spend. So less stuff will be bought and less freight moved.

Eventually we will build in America and have less container traffic more regular truck traffic. How long does that take? 3 years, 8 years?

 

Try 10 years. Land has to be identified and purchased, plant needs to be designed, permits acquired, and capital acquired before ground can be broken. Hairbo announced their pleasant prairie plant in 2017 and it didn't open until 2023.

 

Nobody is building a microwave factory depending only on tariffs staying in place. Who will be at the WH in 4 years, if people really have to pay $500 for a microwave and $45 for a pack of underwear? It takes one executive order to abolish tariffs.
plus with tariffs, the black market grows exponentially.
It is a double edged sword tariffs.
I don't think they'll last more than a few weeks, if even that.

 

To answer the original question: demand and supply. Volume will decrease, but there may be enough trucks parked due to parts shortages or even scrapped due to repair cost jumping up that it’s a toss up, IMO.

 

If you are into audio books you should listen to The Big Store, it is all about Sears. That was the job to have back in the day.

I can remember beating the hell out of the TV's back in those days. And of course the Nintendo had to be blown out and the cartage. HA HA.

 

If at all.......if east of Kansas City, it isn't like there is all this available space to build all of these factories. Many of these folks don't understand that manufacturing jobs are done for, not solely because of outsourcing, but technology has eaten them up as well.

To answer OPs question, we are all about to starve. Tariffs are being put in place, but I don't if you know who realizes that China is not paying the tariffs. Many folks think it's the country itself paying the tariffs. No. It falls on the consumer every time. They pass the buck. It's basically a repeat of post-covid when fuel got ridiculously high. Manufacturers and trucking companies just passed the buck. Due to the willingness of our consumers to spend the money, nothing ever went back to pre-covid prices. One of these days, folks will realize that collective power and education is the greatest power.

 

Yeah, even with the pause on tariffs yesterday we are expecting the market to get worse. Absolute best case scenario is that rather than the market picking up this year, which many economists had predicted, it ends up staying flat.

 

Yes, it's going to get worse.

Let's look at what happened last time.

Trump started implementing tariffs in January 2018. At the same time the TCJA tax plan came into effect - a major economic stimulus. By July, the first farm bailout occurred. By thew end of 2018, a recession was being predicted. In 2019, farms needed to be bailed out again and trucking experienced a "bloodbath". Going into 2020, the national debt had grown by more than $1 Trillion and we were on the brink of a recession despite all the stimulus. Then Covid hit and everything went topsy turvey. The recession came, but the negatives were blamed on Covid, not long term economic, tax, and trade policy.

In short, the limited tariffs with China and haphazard NAFTA 2.0 negotiations dropped the spot market by 15% and tripled the number of trucking bankruptcies. I see no reason why things will be better this time, especially because we cannot afford more stimulus - either through deficit spending or interest rate cuts, both of which are likely to come.

 

One thing you do not seem to get on this is the consumer does not always pay the price. It really depends on the situation. Take Wal Mart for example on this one. They have told all suppliers that they will need to eat at least half the cost of tariffs. Meaning it will not be passed to the consumer. All it takes is for big power like Wal Mart to stand up and make them eat it or not be put in Wal Mart. This will be the move for most large companies.

Before I was a trucker we dealt with Wal Mart a lot and had displays in almost every store in the USA. They do not play games on prices and cannot be bullied like other companies. If you want to play in Wal Marts then you follow the rules or get kicked out. I believe if we play this way on mainly China than we will win this without much of any increases. Time will tell for sure.