Cross-border freight faces mixed market conditions
U.S.-Mexico
Economic conditions
Mexico’s economy continues to face a challenging environment marked by minimal growth. The United States remains Mexico’s predominant trade partner, accounting for approximately 15% of U.S. total trade value and 80% of Mexico’s exports.
But in May 2025, Mexico’s total exports contracted by 0.4% year-over-year, primarily driven by a significant decline of 9% in automotive exports, including a 10.3% reduction in deliveries to the United States. This follows the 2.7% drop in exports from Mexico to the United States recorded in April 2025, ending a 13-month growth streak.
Although certain manufacturing segments like specialised machinery (+53.1%) and scientific equipment (+3.3%) showed resilience, the automotive sector is a cornerstone of cross-border freight and stands to remain under pressure. Compliance with the U.S.-Mexico-Canada Free Trade Agreement exempts auto parts from certain tariffs imposed earlier in the year but tariffs on steel, aluminium and goods made from those products went up to 50% in June.
Conversely, Mexican exports to Europe surged by over 30% in April 2025, demonstrating alternative market opportunities for Mexican products.
These economic conditions have direct implications for cross-border road carriers. The decrease in Mexican exports to the United States, reduced manufacturing and cautious inventory management practices have created excess capacity and intensified competition among carriers. They are open to negotiating rates for long-term projects to keep their fleets moving. These market dynamics have also exerted pressure on freight rates, requiring carriers to optimise operations and manage costs tightly to maintain profitability.
Expansion permit for Colombia Solidarity bridge
In June 2025, the U.S. president granted a presidential permit authorising Laredo, Texas, to expand the Colombia Solidarity Bridge. The project includes the construction of two new four-lane segments (northbound and southbound) designated specifically for commercial traffic. This expansion aims to improve traffic flow and capacity.
New export notice requirement
Starting 11 August 2025, Mexican exporters will need to comply with a new regulation requiring a pre-export notification for specific products. Initially set to take effect in June then July, the requirement was delayed to give exporters more time to prepare. The regulation is also set to apply to fewer tariff codes, covering only jet engines, air compressors, electric motor parts, large transformers and fibre optic cables.
This measure is part of Mexico’s broader strategy to enhance trade monitoring and promote higher domestic content in exports. Exporters are encouraged to promptly review compliance procedures and update internal processes to avoid disruptions. Read our recent article for more information on this new requirement.
U.S.-Canada
The Canadian freight market remains relatively quiet, with overall demand showing little change. Capacity continues to outpace demand for cross-border deliveries in both directions, particularly for southbound freight into the United States. Some tightening did occur from produce-growing regions in the lead-up to the holiday week, as Canada Day (1 July) and U.S. Independence Day (4 July) brought seasonal disruptions. Outside of those brief periods, the market is expected to maintain its current soft condition through July and August.
In terms of equipment types, flatbed and intermodal capacity remains readily available across Canada and southbound to Mexico. With steel and aluminium being hauled predominantly by flatbed, it was expected that those tariffs being raised to 50% would affect flatbed more than dry van. But the impact for both has been minimal and market conditions have remained stable.
Overall, both capacity markets are well-positioned to handle additional freight volume. Ample capacity and limited volatility suggest a continued favourable environment for shippers managing cross-border flows through the summer.
U.S. tariff environment
The extension of lower U.S. reciprocal tariffs until 1 Aug. does not affect trade with Mexico or Canada. Goods that are compliant with the U.S.-Mexico-Canada Free Trade Agreement continue to be exempt from those tariffs while trade negotiations continue. Canada’s prime minister has agreed to aim for a new trade deal by 21 July 2025, following discussions at the G7 Summit.