US Logistics Update [Jul 26, 2025]-English

As the August 1 deadline for tariff relief approaches, President Trump said at the Artificial Intelligence (AI) Summit in Washington, DC on Wednesday, July 23, that “reciprocal tariffs are not going to go below 15%,” adding that “reciprocal tariffs for any country are going to be between 15% and 50%.” “If you open up (markets) to American companies, we will lower the tariffs,” he said, emphasizing that “tariffs are very important, but opening up other countries' markets can be even more important.”

Meanwhile, the New York Times reported on July 22 that the value of the U.S. dollar has fallen to its

lowest level since 1974, as President Trump's tariff bombs have raised doubts about the dollar’s

status as a safe-haven asset. The euro, on the other hand, has gained more than 11% against the

dollar so far this year, rising to $1.18, its highest level in four years. While a weaker dollar makes U.S.

exports more competitive, it is likely to weigh on inflation by raising prices on imported goods.

President Trump, who favors a weaker dollar, renewed pressure on the Fed to cut rates during his

visit, saying neither tariffs nor a weaker dollar stimulate inflation.

President Trump's job approval remains solid at 46%, unchanged from April, according to a July WSJ poll. With 88% of Republicans approving of his performance, the president's political standing is being boosted by a significant improvement in his assessment of the economy, with 47% of respondents rating the economy as “excellent or good” (see graph below), an 11-point increase from April. Meanwhile, there is high dissatisfaction with tariff policy, the tax and spending bill, immigration policy, and the handling of the Jeffrey Epstein case.

NMFC Classification System Overhauled... FedEx Freight Announces 150-Day Delay in Implementation
The National Motor Freight Classification (NMFC) system, the basis for determining less-than-truckload (LTL) shipping rates across the U.S., will undergo a major overhaul effective July 20, 2025. The National Motor Freight Traffic Association (NMFTA) announces that more than 2,000 commodities have been transitioned from the previous multi-component criteria to a weight and volume-centric rate classification system. Many shippers are reacting to this change because bulky but lightweight, low-density cargo (e.g., chairs, foam, cabinets, etc.) are likely to see rate increases. In the meantime, FedEx Freight, the largest LTL carrier in the U.S. with about 15% of the U.S. LTL market, announced that it will delay the implementation of the new classification system for 150 days, starting December 1. Other LTL carriers (e.g., Old Dominion, XPO, etc.) are currently implementing the new classification without a moratorium and warning that inaccurate information could result in rate readjustments or additional costs. Experts say providing accurate weights and dimensions is key to avoiding rate increases. Meanwhile, while U.S. LTL trucking rates are stabilizing, long-haul LTL rates are up 7.8% year-over-year in June, the highest rate of the year so far (see graph below)

'Code Red' congestion at Nordic ports in August and September as Asian exports surge
European port authorities and global shipping lines are warning of severe congestion at Nordic ports in August and September due to the arrival of a large number of export containers from Asia. Exports from China and other major Asian countries to Europe have been growing at double-digit rates so far this year, with more than 2 million TEUs of cargo expected to arrive in Northern Europe alone during August and September. Europe's major gateway ports, notably Rotterdam, Antwerp, Hamburg and the London Gateway, are already experiencing vessel delays and yard saturation, with the industry assessing the situation at a ‘Code Red’ level. Global carriers are reducing transits to some hub ports and increasingly shifting to Denmark-Sweden direct port services to alleviate congestion. European port congestion has caused the on-time arrival rate on the Asia-North Europe route to plummet to 29% as of July, and experts believe the congestion is likely to continue throughout the third quarter.

Airfreight demand plummets as ocean frontloading rises... China e-commerce regulation impact in full swing
The relatively long extension of the U.S. moratorium on high tariffs on Chinese goods to the U.S. until August has led to the frontloading of ocean freight shipments from Asia, which in turn has significantly weighed on trans-Pacific air freight demand, JOC reported, citing Rotate and Freightos. In other words, the moratorium was long enough for ocean freight and there was no reason for air freight. Meanwhile, along with the plunge in e-commerce volumes, air freight rates on the China-US route fell 7% month-on-month to $5.17 per kilogram in July. This is likely due to the US de minimis ban, which has been in effect since May. In fact, e-commerce airfreight from China is down 44% year-on-year, and Temu and Shein's US app downloads have plummeted 77% and 51% respectively. On the other hand, general cargo and high-value items such as semiconductors from Southeast Asia and Taiwan are on the rise, indicating that airlines are shifting their strategy toward traditional shippers and B2B markets.