The ongoing trade war between the United States and China is beginning to show significant impacts on the American economy, particularly in the transportation and logistics sectors. Industry experts are warning of substantial job losses and economic disruption as the effects of reduced trade volumes begin to materialize.
“We’re just at the start of the trade war,” said Craig Fuller, CEO of Firecrown Media and SONAR, in a new video on X. “We’ve been at this for a couple of weeks, but things are definitely starting to take an impact in the economy.”
The immediate effects are already visible in the transportation sector, with major companies announcing significant workforce reductions. UPS has revealed plans to cut 20,000 jobs across its U.S. network, while Penske Logistics will eliminate over 300 positions in Missouri. US Xpress in Chattanooga, Tennessee, has also announced 56 job cuts.
These layoffs represent companies’ attempts to manage costs in the face of declining trade volumes. According to industry analysis, the U.S. trucking and domestic transportation sector is expected to lose 5% to 6% of its volume due to the collapse in imports. While the slowdown has been gradual since Valentine’s Day, experts predict the situation will deteriorate further.
The impact of reduced Chinese imports is particularly striking, with a reported 65% drop in volumes from China to the United States. Gene Seroka, director of the Port of Los Angeles, estimates a year-over-year volume loss of 35% in container traffic. This decline is expected to reverberate throughout the entire logistics ecosystem, which employs 9 million people across the United States.
“The trucking sector layoffs are pretty obvious,” Fuller explains. “It’s an industry that operates with very low margins, and the staffing levels and operational levels tend to match because of the manual nature of moving freight.” He projects that the 5% to 6% reduction in total volume could result in equivalent job losses, potentially affecting 400,000 to 450,000 positions in the transportation sector.
The ripple effects of the trade war aren’t limited to transportation. Retailers are expected to face significant challenges as inventory levels begin to deplete during the summer months. This inventory reduction will likely lead to decreased sales and force companies to reevaluate their staffing needs and cost structures.
The situation appears unlikely to improve in the near term. Recent announcements from the administration suggest no immediate resolution to the China-U.S. trade war is in sight. “As long as this happens, it will continue to be a drag on U.S. economic activity, particularly around the freight market,” Fuller warns. Apollo Global’s analysis, as reported by FreightWaves, indicates that substantial layoffs will continue across both the trucking and retail sectors. The combination of reduced trade volumes, depleting inventory levels and ongoing economic uncertainty presents a challenging outlook for these industries.
