Trump’s Tariffs Are Destroying the Trucking Industry
My mother started Hemisphere Freight in Toronto in 1985. It’s a customs brokerage firm that helps clients manage duties, taxes and tariffs when shipping across the Canada-U.S. border. My brother Charles and I took over in 2013, and we later created a sister company called CGL Transport that connects clients with trucking providers. We work with a huge range of customers: companies that make noise-barrier panels, media conglomerates shipping telecommunications equipment, food providers and more. Most delivery services don’t understand customs like we do, so having the two companies under one roof is a big advantage for us. CGL has been successful; we’ve grown 50 per cent every year since we started, and we’re on track for $1.5 million in freight bookings this year.
Like any new business, we’ve faced headwinds: some harsh winter weather has delayed shipments, and we’ve had to manage new Canadian government mandates that require clients to get registered with a new accounting portal for duties and taxes. But all that was nothing compared to Trump’s announcement of tariffs on Canadian goods. Eighty per cent of our companies’ business depends on cross-border trade. I thought our entire model was doomed. My initial reaction was simply, “Is this it? Do we throw in the towel?” That only lasted a moment, though. My brother and I are both still young and hungry, and we weren’t ready to give up—but we were scared.
In January, when the U.S. announced details of the tariffs, trucks were booked solid almost overnight as clients raced to get their goods over the border. The wait time for a truck shot up from 24 hours to two weeks, and prices rose from $2,500 to $7,000. To get our clients’ shipments where they needed to go, we had to improvise. One client, a franchisee for a restaurant chain, needed to bring in some equipment from the U.S. to meet a deadline. All we could find on short notice was a refrigerated truck, which was a huge risk—condensation might have collected inside that could harm the delicate equipment. We didn’t have a choice. Thankfully, the equipment was fine.
On February 1, Trump signed an executive order to impose tariffs on Canada beginning three days later, and things got even more frenzied. The ambiguity of the situation was causing huge anxiety for clients, and I felt like a therapist talking them off a ledge. We were getting thousands of emails a day, the phones never stopped ringing and everyone wanted us to drop everything and get back to them. It was stressful for them, of course; they were forced into making major, split-second financial decisions, which we then had to accommodate. One manufacturer was on the fence about buying a million-dollar machine for their plant—they decided to pull the trigger to avoid the tariffs, which would have been upwards of $250,000.
I have two kids, a four-year-old and a six-year-old, and my brother has four, including young twins. There were many nights when we went home, put them all to bed and logged back in to answer emails and put together reports. Lots of clients wanted budget forecasting for what trucking rates were going to be like, and how much things would cost if their goods were being tariffed. The tariffs have complicated the work of completing customs entries, too. We had to raise our rates to reflect all the extra time needed to do this work, and for the extra effort of our employees.
Things slowed down after that rush, however. That was a relief, but only a temporary one. Business is now about 20 per cent slower than usual, I’m sure due to all the uncertainty over what will happen next. People are trying to ride out the tariffs, hoping Trump will change his mind, or that there will be more government support. After a period when clients were making decisions at lightning speed, a lot are now holding off, waiting to see what will happen next.
Things have deteriorated at the border as well. It used to take one or two hours for a truck to pass through customs. Now we’re averaging three to four hours. And just about every day we get a truck held at customs overnight because U.S. border security is scrutinizing more vehicles. Truck drivers can only work a certain number of hours per day before they need to rest, so the delays have a trickle-down effect, increasing delivery times and the overall cost of shipping. Of course, those delays are partly offset by the fact that traffic across the border is lower—thanks to tariffs.
Despite all of this, I’m confident in CGL’s future. People are eventually going to have to import into Canada, and more and more they’ll be looking outside of the U.S. Ocean freight to the U.S. has declined, and we’re noticing a rise in ocean freight to Canada as shipments are diverted. We’ve expedited the timeline for opening a Vancouver office, so we can be better positioned to handle imports from China, which I anticipate a big increase in as shippers avoid the U.S. This is my next growth model: pivoting away from America and leaning more into the rest of the world.
In retrospect, I don’t think I could have ever thrown in the towel. This is a family business, and I hope one day my kids will get involved. It’s what I love. And I thrive under pressure.
