Mexico freight costs rise and Canada waits for clarity

U.S.–Mexico

Cross-border freight conditions between the United States and Mexico remain under pressure entering July, following a particularly challenging June. The market continues to be impacted by congestion at the border and extended dwell times after freight crosses, as limited trucking capacity and coordination challenges delay onward pickup and delivery, creating inefficiencies across networks.

Capacity constraints keep cross-border pricing firm

Operational imbalance remains a key constraint. Export flows continue to exceed imports, particularly in the Northeast (Coahuila, Nuevo Leon), Bajío and Central Mexico. Trucks moving northbound freight have limited return volumes, forcing carriers to reposition equipment empty. This increases costs and reduces availability of carriers willing to cover loads into the United States.

This imbalance is driving higher costs for shippers in select corridors including Jalisco, a hub for high-tech manufacturing, and door-to-door lanes into Texas for shippers that want to avoid the backlog in Laredo.

At the same time, carriers are operating with smaller driver pools following stricter enforcement of B1 visa requirements and cabotage rules forbidding Mexico carriers to move goods between two points in the United States.

Facing higher operating costs (bridge and highway tolls, maintenance, insurance, fuel) and the continued impact of a strong peso on dollar revenues, carriers are becoming more selective with the freight they accept, prioritizing loads with better operating conditions and stable execution schedules.

Border-related delays are also affecting execution. Units held at the border for longer periods are increasing cycle times and limiting network efficiency, making planning more difficult.

From a pricing perspective, conditions remain firm. Carriers are largely maintaining rates on contractual business where there is operational consistency, while quoting higher rates for new opportunities in line with current market conditions. Increased competition among shippers for available capacity is reinforcing this dynamic.

Overall, the market is showing early signs of stabilization compared to June, but conditions remain tight. Capacity constraints, operational inefficiencies, and cost pressures are expected to persist in the near term.

This environment requires greater discipline in execution and planning, including securing capacity earlier, building in additional lead time for border handoffs and delays after crossing, maintaining consistent pickup and delivery schedules, and providing accurate shipment information so carriers can plan more efficiently and maintain competitive pricing.

Mexico exports shift toward high-tech manufacturing

Investment in AI-related manufacturing is accelerating rapidly, with Mexico attracting a record amount in computing and electronics in the first quarter of 2026 alone, already exceeding full-year 2025 levels.

This is directly tied to export performance, as shipments of data processing equipment nearly tripled year over year (y/y) in Q1, driven almost entirely by U.S. demand for exports linked to data centers and AI infrastructure, with some segments growing over 150%, reflecting strong demand for servers and related technology.

As a result, computing equipment has overtaken automotive as Mexico’s top export to the United States, marking a structural shift toward higher-value, technology-driven trade.

Automotive exports are showing modest recovery, increasing 4% y/y through May and reaching one of the highest levels on record despite flat production. Growth has been supported by diversification to markets beyond the United States, including Canada and Europe, helping offset softer U.S.-bound volumes. Automotive industry demand for domestic Mexico freight services and cross-border services now competes with other manufacturing industries that are increasing exports.

Broader export trends remain strong. Mexico continues to gain share as the leading supplier to the United States, representing almost 17% of U.S. imports in the latest figures, with exports reaching record monthly levels and maintaining its position as the top U.S. trading partner. The closest follower is Canada, representing 11.7% of U.S. imports. Overall, in the first four months of 2026, Mexican exports to the United States have grown 9% y/y.

Tolls at Laredo crossing set to increase

The Laredo City Council has approved a phased increase in bridge tolls for southbound trucks crossing into Mexico, with initial adjustments set to begin in 2027. However, the measure is facing strong opposition from industry groups, who argue it could impact the competitiveness of the Laredo–Nuevo Laredo corridor. Given the formal challenges and ongoing pushbacks, implementation is uncertain.

U.S.–Canada

Freight market conditions in Canada remain soft relative to the United States, with June continuing to highlight a clear divergence between the two markets. While U.S. freight dynamics are shifting in carriers’ favor, supported by tightening capacity and higher rates, Canada has not followed the same trajectory. Instead, Canadian conditions continue to resemble those seen in June 2025, characterized by stable but muted demand and limited upward pressure on pricing.

USMCA uncertainty weighs on Canada cross-border freight demand

At the core of the Canadian outlook is the non-renewal of the U.S.-Mexico-Canada Agreement as of July 1, and the subsequent beginning of a ten-year review cycle. The agreement’s provisions stay in place but can be amended during annual reviews. Member states can also make separate agreements with each other.

Trade policy discussions have become one of the primary topics across the Canadian logistics and manufacturing landscape as the outcomes of USMCA negotiations are expected to directly influence cross-border freight volumes, investment decisions, and overall demand trends. This uncertainty is contributing to a more cautious operating environment, with many businesses holding back on inventory expansion and production scaling until there is greater clarity on the future trade framework.

Canada freight rates stabilize

From a market standpoint, pricing has generally stabilized across most regions. Outside of corridors where a lot of fresh produce travels, rate increases have been limited and largely driven by external cost factors rather than underlying demand strength.

Fuel costs and operating expenses remain the primary drivers of upward pricing pressure, with carriers focused on cost recovery rather than margin expansion. This stands in contrast to the United States, where tighter capacity is playing a larger role in rates.

Canadian truckload capacity stays available outside seasonal lanes

Capacity across the Canadian market remains available, and in many areas still exceeds demand. However, this balance is not uniform. Agricultural regions and produce corridors continue to experience localized tightness, particularly as summer harvest activity ramps up. Outside of these pockets, most markets are operating with sufficient coverage, reinforcing the broader theme of a balanced but relatively soft environment.

With the Canada Day and U.S. Independence Day holiday period, short-term tightening is expected across select cross-border and domestic lanes. However, this is likely to be temporary. Following the holiday, the Canadian market is expected to revert quickly back to baseline conditions, with capacity once again outpacing demand in most regions.

Overall, the Canadian freight market is mostly in a holding pattern. While cost pressures persist and seasonal disruptions create periodic tightening, the absence of strong demand growth continues to keep capacity in balance. Until there is greater clarity on trade policy and a sustained improvement in industrial demand, conditions are expected to remain stable, with only localized volatility through the summer months.

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