Canada looks to EU and UK to replace tariff

Rates hold steady as carriers blank voyages to mitigate softer demand Container spot freight rates on the main east-west trades continued in much the same vein ... FDX: WRAPPING UP INPOST TAKEOVERAAPL: DELIVERIESZIM: NEW HAPAG DEAL TALK CONTINUESDHL: HITTING NEW STUNNING LEVEL KNIN: NEW HIGH DSV: ANOTHER PRICE TARGET CUT AMZN: TACO PORTFOLIO ACTIVITYDHL: IT LOOKS GOODDSV: DOWN TO A NEW LOW DSV: REALITY CHECKODFL: PRICING POWER XOM: GREEN PUSHEXPD: MOMENTUM FDX: WRAPPING UP INPOST TAKEOVERAAPL: DELIVERIESZIM: NEW HAPAG DEAL TALK CONTINUESDHL: HITTING NEW STUNNING LEVEL KNIN: NEW HIGH DSV: ANOTHER PRICE TARGET CUT AMZN: TACO PORTFOLIO ACTIVITYDHL: IT LOOKS GOODDSV: DOWN TO A NEW LOW DSV: REALITY CHECKODFL: PRICING POWER XOM: GREEN PUSHEXPD: MOMENTUM The launch of a full-blown trade war between the US and Canada, coupled with recent transatlantic talks between Canada and the EU, as well as the UK, is beginning to fundamentally change the country’s freight flows. The US 50% tariffs on Canadian goods and the targeted response on US imports has provoked Canadian importers to begin looking at sourcing goods that previously came from the US in Europe, Steffen Manz, founder and CEO of forwarder Speed Global Logistics, told The Loadstar. “When you look at the verticals, the immediate push is coming from industrial manufacturing, automotive components, and consumer packaged goods – essentially, any sector where the margins are razor-thin and recent 25% to 50% tariffs erase profitability. “We aren’t seeing massive, overnight shifts in total container volumes yet, but rather trial batches. Shippers are testing the waters with a few teu, or less-than-container load (LCL) shipments, from the EU to evaluate transit times and landed costs. “You can’t just flip a switch; you have to vet new suppliers, align technical specifications, and adjust to longer transit lead times. Moving from a two-day cross-border truckload to a 14-to-21-day ocean voyage means companies have to completely re-engineer their inventory carrying costs and warehouse capacity,” explained Mr Manz. However, he had noted a growing sense of urgency, in part caused by the immediate disruption to US-Canada cross-border freight flows resulting from the new tariffs. “It’s been highly disruptive, and messy,” he said. “On the ground, we’re seeing a lot of friction at the borders. Customs brokers are buried under complex paperwork trying to determine tariff exemptions, and we’ve seen cross-border freight volumes soften on certain lanes as companies pause shipments to see how the dust settles. “The dollar-for-dollar retaliation has created an atmosphere of tit-for-tat friction. For forwarders, it means asset utilisation for cross-border trucking is fluctuating wildly, and we are spending a lot more time consulting with panicked clients on compliance and tariff mitigation, rather than just moving freight,” he added. At the same time, however, the considerable political overtures between Canada and the EU recently, as well as the formal entry of the UK into the Comprehensive and Progressive Agreement for Trans‑Pacific Partnership (CPTPP) on 1 September – under which the UK and Canada now trade – could create breathing space for Canadian importers searching for new sourcing options. “The trade agreements provide an excellent structural safety valve,” Mr Manz said. “The formal entry of the UK into the CPTPP, alongside existing CETA benefits, creates a highly favourable regulatory corridor across the Atlantic. For Canadian importers, it makes British and European goods financially competitive with US alternatives, even when you factor-in ocean freight costs. “From a forwarder’s perspective, it will inevitably shift the mode mix. We anticipate less cross-border over-the-road (OTR) trucking and an increase in inbound maritime volumes into the ports of Montreal, Saint John, and Halifax, alongside an uptick in transatlantic air freight for high-value, time-sensitive verticals,” he said. Crucially, after the events of the two years since Donald Trump’s second administration began, the probability of the US-Canada trading relationship returning to its status quo is fast disappearing. “The motivation to look to Europe is pure survival,” Mr Manz said. “With cross-border trade becoming punitive and unpredictable, EU sourcing under CETA offers duty-free stability, and we absolutely expect this to accelerate through Q4 and into next year. “Supply chain managers hate volatility more than they hate high costs. Even if the US and Canada magically sat down tomorrow and patched things up, the psychological damage is done – supply chains have deep muscle memory. “Shippers realised they were dangerously over-exposed to a single trading partner. “B2B buyers are actively diversifying their supplier portfolios now as a risk-mitigation strategy, meaning the pivot to Europe isn’t a temporary knee-jerk reaction – it’s a structural realignment,” he added. 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