🎣 Trump’s Tariff Threat

This is our final newsletter of the week as we pause to celebrate Thanksgiving. We're truly grateful for each and every one of you who takes the time to read and engage with our content.

In today’s deep dive, we explore the potential impact of Trump’s tariff announcement on the freight industry.

Plus:

• Top 8 Turkey Producing States
• Cartel's Trucking Drug Network Uncovered
• Macy's Exposes $154M Delivery Expense Fraud
• & more.

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🐔 WHAT’S COOKIN’ IN FREIGHT

🦃 Thanksgiving by the Numbers: The Logistics of a Holiday Feast. Did you know that each Thanksgiving, Americans consume roughly 46 million turkeys—21% of the annual total—equating to 736 million pounds, requiring nearly 19,000 truckloads to distribute nationwide. Minnesota leads turkey production among eight key states. Additional holiday staples include 214 million pounds of potatoes, 80 million pounds of cranberries, 50 million pounds of sweet potatoes, and 19 million pies. Behind the scenes, countless drivers and supply chain workers ensure these classics reach our tables. This logistical feat is a mere fraction of the scale and effort behind America’s favorite harvest holiday. Let’s take a moment to appreciate the teamwork that fuels our Thanksgiving traditions!

🚓 Cartel's US Drug Network Exposed. Oralia Rodriguez Flores, 40, admitted to aiding Mexico's violent CJNG cartel in trafficking cocaine and methamphetamine into the US via long-haul truck drivers. Over three years, Flores facilitated transporting drugs worth $22,000 per kilogram and laundering over $1 million back to Mexico using commercial trucking networks and runners tied to an Asian laundering group. Facing life imprisonment, she pleaded guilty to drug and money laundering charges. Authorities aim to dismantle CJNG operations funding cartel violence. President-elect Trump signals intensified US-Mexico border crackdowns, citing tariffs and military force against cartels as potential solutions. Trump said Mexico (and Canada) has the power to resolve the cartel issue and expects them to “pay a very big price” until the matter is resolved.

🤯 Macy's Uncovers $154M Accounting Scheme. Macy's revealed that a single employee concealed $132–$154 million in delivery expenses through accounting errors since late 2021. These hidden costs, discovered during a forensic investigation, represent a fraction of the $4.36 billion spent on deliveries over the period. The employee responsible has been terminated, and no other staff were implicated. Macy's assured stakeholders the issue did not affect cash flow or vendor payments. This subsequently caused Macy to postponed its Q3 2024 earnings (will be released December 11). CEO Tony Spring said the company is working “diligently” to complete the investigation and his colleagues are ready to serve customers and “execute” their strategy for a successful holiday season.

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Trump’s Tariff Announcement: Major Impacts on North American Trade

What's Happening?

President-elect Donald Trump has announced plans to impose 25% tariffs on all imports from Canada and Mexico starting January 20, 2025. Additionally, there will be a 10% tariff on all goods from China, aiming to curb illegal immigration, drug trafficking, and fentanyl imports.

Trump emphasized the reasoning:

"Thousands of people are pouring through Mexico and Canada, bringing crime and drugs at levels never seen before."

Key Sectors Affected

1) Motor Vehicles:

• Imports from Canada and Mexico in this sector totaled over $200 billion in 2023.
• Tariffs could increase costs by $50 billion, likely driving up vehicle prices.

2) Crude Oil & Gasoline:

• 70% of U.S. crude imports come from these countries.
• Gasoline prices may see a 37% spike, as crude oil makes up a large share of costs.

3) Electronics & Metals:

• Goods like electronic computers and primary metals (aluminum, steel) face higher prices.

Expert Opinions

• Craig Fuller, FreightWaves, wrote:

"25% tariffs on North American production means that production is likely to move to other parts of Asia and doesn’t secure our supply chains."

• Benjamin Gordon, Cambridge Capital, wrote:

"From a national security standpoint, Trump should be seeking tariffs on China, not on US allies that are geographically adjacent. The best way to strengthen our supply chains is to create shorter North American based manufacturing, warehousing and transportation networks with redundancy."

• Matt Silver, CEO of Cargado, dismissed the tariffs as posturing:

Implications

• Inflation risks: Higher prices on essential goods like vehicles, gas, electronics, and metals.
• Trade strain: Critics argue this move risks damaging ties with top U.S. trading partners.
  • Mexico is the #1 U.S. trade partner with $72.5 billion in trade in September.
  • Canada ranks second with $63.8 billion in the same period.

Opposition from Leaders

• Mexican President Claudia Sheinbaum:
  "It is not with threats or tariffs that we address the migration phenomenon."
• Ontario Premier Doug Ford:
  "A 25% tariff would be devastating to workers and jobs in both Canada and the U.S."

Bottom Line

These tariffs, if implemented, could have significant inflationary impacts on North American trade, with ripple effects on industries and consumers alike. Critics stress the importance of fostering collaboration over confrontation to avoid disrupting economic stability.

Sources: FreightWaves, Jason Miller/LinkedIn, X

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🌎 AROUND THE FREIGHT WEB

👌 Gord Speaks, We Listen. Gord Magill discussed how DOGE can benefit the industry on The Bottom Line, addressing issues like the driver shortage and industry challenges with straightforward, no-nonsense approach.

📃 Honor Thy Contract. Echo Global Logistics CEO, Doug Waggoner, broke down how honoring contracts can enable brokers to strategically leverage the spot market.

📈 Freight Rate Hike. Old Dominion Freight Line will raise its general rate 4.9% starting December 2. Todd Polen, VP of pricing service, said rate increase will help give employees competitive wages and benefits and other improvements for the company.

🚫 Tackling Truck Parking. Officials in Haverall, Massachusetts are enforcing their city’s truck parking policy by fining offenders $50 fine and providing “education” due to increased traffic because of the local Amazon warehouse.

💰 Last-Mile Solutions. OneRail has secured $42 million in funding to enhance its last-mile delivery. OneRail plans to aid the order process for split orders, out-of-stocks and canceled orders.

🏛️ Ex-Manager's Embezzlement. Gabriel Ruiz De Chaves plead guilty to wire fraud and was sentenced to over two years for embezzling $1.5 million from a California business between 2012 and 2019.

🎣 THE FREIGHT CAVIAR CORNER

• Podcast: Charley Dehoney dives into his freight journey and how the "GlobalTranz Mafia" shaped his path. Listen to the interview here.
• Conferences: Join us at Manifest Vegas 2025. Register with our link and save $200 on the current price!
• Freight Jobs: Find the latest freight job listings here.
• Find Shippers Fast: Looking for customers? Check out ShipperCRM, the world's largest shipper database, and apply for access here.
• Epay Manager Demo at F3. Read our summary of Epay Manager's demo at F3 last week and watch their demo by clicking here.

FREIGHT MEME OF THE DAY