Earlier this month, we saw another chapter in the tariff gridlock imposed by the Trump Administration. After lifting a month-long pause, the U.S. implemented tariffs on Canada and Mexico, along with increasing tariffs on China by 10%. Read on to find out more about how this will affect the trucking industry and how your trucking company can respond.
The Effects of Tariffs on Truckers
According to the American Trucking Associations CEO Chris Spear, Trump’s across-the-board tariffs could have a disproportionate impact on truckers. This is particularly true for the 100,000 truckers hauling 67% of the goods traded with Canada and 85% of the goods traded with Mexico. Spear said that he expected a more surgical and strategic approach.
As a direct result of the tariffs, the price of a brand-new truck could go up to $35,000. This could easily put new equipment out of reach for smaller carriers. Tariffs could also lead to a reduction in cross-border freight, on top of increasing the costs of operations for trucking companies.
Spear also noted that the Trump Administration understands the industry and knows how important trucking is for the supply chain. He said that the trucking industry urges all parties to return to the table and negotiate a new agreement as swiftly as possible.
How Trucking Companies Are Responding
Though it’s too early to make predictions on specific downstream effects of tariffs, some Canadian carriers have already begun laying off employees or canceling orders. For instance, one in every three fleets in Ontario indicated that they’re expecting layoffs. In the aftermath of the tariffs, the number of laid-off employees is only expected to grow.
According to Stephen Laskowski, CEO of the Canadian Trucking Alliance, the effect of the tariffs will increase the longer they are in place. Their continued impact will not only put a strain on trucking companies but will also lead to permanent fleet closures.
How to Reduce Your Operating Costs
As most trucking companies start to feel the effects of tariffs, they’re also looking to combat them by lowering their operating costs. One way to do that is to use Level 2 and Level 3 credit card processing. Providing L2 and L3 data to card networks enhances transaction security and transparency, reducing the likelihood of fraud and disputes.
In return for this data, card networks offer lower interchange fee rates for domestic payments. Interchange fees cover the costs of risk, fraud, and handling, and they make up most of your processing fees. If you qualify for L2 or L3 processing, you should take advantage of it.
Ready to Start Saving?
If you’re looking for practical ways to reduce operating costs and increase your bottom line, optimizing your payment processing is a smart place to start. At MONA Payment Solutions, we help businesses qualify for Level 2 and Level 3 credit card processing to lower interchange fees and enhance transaction efficiency.
Contact us today to find out if your business qualifies and how we can help you start saving immediately through smarter, more secure payment solutions.