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Highlights:
Overall: The freight economy is sending mixed signals. On the surface, the rebound in activity is largely as predicted (based on inventory destocking through 2025 and stable B2C and B2B demand through Q4 and into Q1). That was a stimulus for restocking. But the global supply chain is scrambling to avoid stockout risk and possibly to get ahead of a change in tariff policy due before July 24th. But is the current activity enough to create new overstock risk, one that would create sluggish activity late in the peak?
•Inventory stockpiling strategies were still being reported across global PMI reports in April. Firms were clearly in a scramble posture to secure raw materials and component parts volumes to help safeguard against stockouts as the closure of the Strait of Hormuz was effectively still in play.
•Tariff front-running of orders was also still a factor as firms try to get ahead of Section 122 tariff expiration. New 301 tariffs are expected to be higher, but the new 301s may not be materially high enough to warrant front-loading. Most adjusted on higher tariffs last year and still have those buffers built into their pricing schemes. Stockout risk is real, tariff front-running risk is less so.
•What isn’t clear is the magnitude of front-loading. Is it sufficient to make the back-half of the year sluggish? Or is there enough of a mix of those holding out for lower prices vs. those trying to front-load that the traditional peak is still reasonable?
Link To Full Edition: LTL Monthly Executive Briefing PDF
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