April 10, 2025
Whether or not anyone likes it, tariffs have hijacked this month’s newsletter. Everyone, from every industry and every supply chain link, is trying to make sense of things post-Liberation Day. One minute, we’re figuring out if North American shipments will cost more or catch a break; the next, we’re recalculating China tariffs by what seems like an hour. Meanwhile, construction projects are hitting the panic button as material costs shoot through the roof, Wall Street is having a meltdown (namely LTL carriers), and all the while, Burlington is quietly buying up distribution centers. And your last mile? It’s about to get messier with border bottlenecks slowing everything down. The good news? While your competitors are still stuck on the headlines, we’ll help you know what’s happening behind the scenes.
Your customs team probably hasn’t slept much since the 10% universal tariff announcement on “Liberation Day” (April 2). But the real story lies far beyond the headline rates and spotting the fine print and details.
Got shipments flowing through Canada and Mexico? Good news — you’re dodging those targeted tariffs for now. But don’t celebrate too hard — your USMCA-noncompliant shipments still get slapped with that brutal 25% tariff, though this might drop to a more manageable 12% if certain national emergency declarations get scrapped. So, build two game plans right now — one for the 25% pain we’re currently feeling and another for that potential 12% world. When the rules change, you’ll be ahead of the curve.
If your Chinese suppliers are blowing up your phone about the tariff situation, buckle up. Factor in the latest developments from April 9, and your actual tariff burden has reached an unprecedented 104% on Chinese imports to the U.S. under President Trump’s new measures. Meanwhile, China has retaliated against American goods entering their market with an 84% counter tariff. You can also kiss that $800 de minimis exemption goodbye starting May 2 — a big change for retail e-commerce operations and small-volume importers that relied on that duty-free threshold.
We can’t talk about tariffs without mentioning U.S. manufacturing, right? Boosting the sector stateside is the whole motivation behind them in the first place. Yet even though construction hit $233 billion last year and kept climbing in early 2025, the tariffs actually complicate matters. Supply chain managers nationwide have a difficult choice: Roll with costly domestic sourcing or pay tariffs on imported materials.
Tariffs are punching holes in factory budgets everywhere. Look at the casualties: A $300 million recycling plant in Erie scrapped (200 jobs evaporated), a $6 million Kentucky detergent factory slapped with an extra $250,000 for machinery, and factories facing $100-$200 per-square-foot costs watching $5 roofing increases destroy margins. Construction materials and industrial supply components tell the same story — metal components up 20-30%, plumbing 10%, drywall 20%. Even “American-made” chillers contain Chinese wires, Canadian steel, Indian pipes, and parts from Mexico, Germany, Peru, and Korea.
Racing to save your factory project? Forget perfection — speed wins now. While contractors frantically preorder materials and designers push ahead with incomplete plans, your procurement strategy must handle both today’s price spikes and the administration’s admitted “two-year” domestic supply catch-up timeline. It’s a brutal choice for operations caught mid-construction: Eat the costs, charge customers more, or abandon ship. Your edge isn’t about operational excellence anymore — it’s about securing prices before another potential tariff announcement.
While you update your tariff spreadsheets, Wall Street votes with sell orders. LTL stocks plummeted 18% in just two days following the April 2 announcements, extending their year-to-date nosedive to a brutal 33%.
LTL carriers commanded premium valuations during the pandemic restocking frenzy, but that party is officially over. FedEx Freight’s recent quarter tells the tale — revenue down 5.3%, tonnage plunging 7.6%, and yields limping up 2.2%, resulting in an 87.5% operating ratio (300 basis points worse year over year). Analyst Bascome Majors slashed Q1 earnings estimates by 2-7% and cut 2025 forecasts by “high-single-digit to midteen percentages.” Yet carriers still gamely push for mid-single-digit rate increases while fighting for volume.
Manufacturing’s January flicker of growth (after 26 dismal months) died by March, with PMI falling back to 49. New orders plummeted to 45.2 from January’s promising 55.1, while prices jumped 7 points to a worrying 69.4 as tariff costs bite. TFI International shows the pain — the stock is down 41% this year as CEO Alain Bédard admitted the company’s U.S. LTL business faces a “negative flywheel of poor service,” driving weak volumes and pricing. With 80% industrial exposure, TFI’s targeted 93-95% OR looks headed for analysts’ predicted 99%. Wall Street might eventually see bargains here, but first, supply chains must confront tariff chaos, weak demand, and networks stuffed with Yellow’s abandoned business.
While trucking companies struggle with market meltdowns, Burlington Stores plays a different game — going on a real estate shopping spree. The bargain retailer bought two distribution centers it once rented — a move worth watching if your CFO keeps grumbling about rising warehouse lease costs.
Burlington grabbed a monster 2 million-square-foot DC in Savannah, Georgia, that won’t open until 2026. Then, it doubled down by negotiating the purchase of what it calls its “most efficient and automated West Coast distribution facility” in Riverside, California. Why? Owning rather than leasing gives Burlington greater control over building design and helps avoid costly rent increases during lease renewals. After these moves, Burlington now owns four out of its 12 DCs — a third of its network.
That said, ditching landlords isn’t cheap — Burlington’s expenses shot up to $844 million last year (blowing past its $750 million budget by 12.5%). And it hasn’t even paid for Riverside yet — that’s part of next year’s whopping $950 million spending plan. Burlington might borrow cash to pay for it, but apparently, the accountants aren’t sweating the debt since those lease obligations were already on the books. Bold move in such uncertain times.
Hate to close this out with another tariff story, but let’s face it — tariffs are the uninvited guest crashing every supply chain party. And guess who’s getting the worst hangover? Your last mile. While you’re busy dealing with inflated costs and scrambling suppliers, your customers stand at their doorsteps, tapping their feet. They couldn’t give 2 cents about your tariff troubles — they paid for their stuff and want it now.
Cross-border shipments now crawl through tariff quicksand — mountains of paperwork and endless inspections trap your inventory at borders for days. Retailers are panicking, abandoning international suppliers and frantically relocating warehouses stateside, forcing you to redraw delivery routes on the fly. Meanwhile, your e-commerce customers still expect same-day delivery for Canadian and Mexican goods, clueless about the tariff gauntlet their packages must survive. Auto parts, electronics, and farm products crossing borders multiple times bleed money at every checkpoint. And with volume fluctuating wildly week by week, flexibility is more important than ever.
Companies still treating the last mile as a series of individual transactions rather than an interconnected system might as well give up now. Success requires real-time tracking and analytics that expose where goods sit, which routes perform, and where bottlenecks form. Think of it this way: When tariffs send your supplier packing overnight, dinosaur routing systems collapse, while smart networks can pivot faster than a TikTok trend. Your delivery network needs the flexibility to stretch or shrink at will, so hook up with new partners quickly. Tariffs are just the appetizer; more disruptions will inevitably hit, and you’ll be thankful for the agility.
While tariffs may turn your supply chain into a financial obstacle course, your supply chain doesn’t have to suffer like others. Yes, the world is changing — but at FRAYT we’re ready. Our delivery network, vehicles, and solutions are your constant in these unpredictable times:
Ready to supercharge your deliveries? From the middle mile to the last mile, we’ve got your back. Sign up with FRAYT now and watch your supply chain transform from good to great.
