China actually ranks a distant third behind Mexico and Canada in US trade, a fact easy to lose amid the broader trade policy story and the focus on East-West lanes over the past eighteen months. The administration has not lost track of it: the president stated his intent to tariff Canada, the US's second-largest trading partner, at 25% on his first day in office, then signed the executive order on February 1, 2025. Negotiations have continued off and on since, with the headline of August being the failure of those negotiations, with the US applying additional 50% tariffs, and removing exemptions, as the month closed [September mid-period update: Canada reciprocated 15%, 25%, and 50% tariffs, and outright bans, on specific products as of September 8. Keep any eye on the headlines, this is a dynamic situation.]

For readers and consumers conditioned to waves of tariff threats and bluster followed by complex legislation that later reciprocated, enjoined or invalidated, there is a real sense of tariff news fatigue. For businesses trading across the Canadian border, “wait-and-see” may be a sound strategic stance, but it still leaves near-term production, sourcing, allocation, and routing problems needing a tactical response. The good news: eighteen months of cross-border trade disruptions should mean most shippers and producers are already well versed and connected to specialized providers who can offer advice and expertise. The bad news: logistics strategies that optimize for tax and tariff costs generally tend to increase cost of inventory, regardless of those savings. As an aside, Flexe recommends shippers and 3PLs read white papers built on data from Trump’s first trade wars: those who don’t learn history are doomed to repeat it. This is also reflected anecdotally, with LMI respondents flagging sharply rising US inventory costs since the US-Canada dispute began.

With high uncertainty that current tariff regimes will hold, and with costs already elevated (SONAR transportation costs, for instance, are at their highest level since Q2 2022) short-term strategies may win out. Spot rates in both transportation and warehousing carry a premium to contract rates, but paying that short-term premium to avoid long-term sunk costs in cross-border Canada lanes looks worthwhile, and that’s exactly what shippers did in August.

Rising labor costs and consumer demand for fast delivery are driving logistics operators to accelerate warehouse automation. North American companies ordered nearly 18,000 robots valued at $1.2 billion in the first half of this year, a 7% increase in value year over year, as businesses look to cut costs out of their supply chains. With average U.S. warehouse wages climbing over 41% in the last decade alongside persistent labor shortages, operators are increasingly leaning on technology to protect margins and keep pace with the fastest-delivery competitors in retail.

The shift toward modern robotics is no longer just about cutting costs.It is increasingly about buying operational resilience. Today’s automation is simpler to deploy with flexible options like subscription-based models and drop-in robotics that integrate into existing infrastructure without requiring massive facility overhauls. These solutions target labor-heavy tasks such as picking and loading, helping operators handle seasonal volume spikes without overhiring in tight labor markets.

As labor pressures and automation investment reshape warehouse productivity at the node level, fixed real estate models become harder to justify. Shippers navigating these shifts increasingly rely on flexible logistics partners, including automation providers such as Robotics-as-a-Service (RaaS). This approach lets shippers dynamically adjust capacity, access automated operations on demand, and scale networks without taking on rigid capital expenditures that warehousing or robotics investments have traditionally required.

Transportation capacity continues to tighten as the freight market begins to recover. Q3 truckload rates are pointing to a meaningful shift in the market, with spot rates remaining above contract rates for a second consecutive quarter and forecasts calling for truckload rates to reach a four-year high. As of mid-August, spot rates were up roughly 35% year over year, as carrier exits and limited capacity continue to put upward pressure on transportation costs.

The pressure is expected to continue. A late August survey of 644 owner-operators, small fleets, and brokers found that 86% of brokers said capacity is already more difficult to secure, while 72% expect it to tighten further over the next three to six months. At the same time, 66% of carriers expect freight demand to increase over the same period, creating the potential for more freight to compete for a shrinking pool of available capacity. Jason Seidl, a transportation analyst and managing director at TD Cowen, said, “It’s a supply side issue. And capacity is still coming out.”

For shippers, this makes network design increasingly important. As transportation becomes more expensive and less predictable, positioning inventory closer to demand can help reduce reliance on constrained long-haul capacity. Flexible warehouse capacity gives shippers more options to shift inventory between markets and adapt their networks as transportation economics continue to change.

Northern NJ: The +17.5% increase over the past 3 months in spot warehousing price coincides with a front-loaded import peak at the East Coast’s primary container port. FreightWaves reported the Port of New York and New Jersey moved 503,016 loaded TEUs in June, up 7.6% year over year, with overall June volume (loaded plus empty containers) reached 769,422 TEUs, up 11.9%. Cargo landing earlier than a normal peak season has to be stored somewhere, and that timing is consistent with the step-up in spot demand (and pricing).

Kansas City: Expect spot rates to keep firming through the fall peak. Vacancy is tightening, spot pricing has risen every month since spring, and CBRE’s absorption figures say demand is doing the pushing rather than supply withdrawing — a combination that historically doesn’t reverse in the middle of peak season. Shippers who wait until the holiday build to secure short-term pallet capacity here will likely pay more than those who commit in the next cycle or two.

Chicago: Avison Young reported that the share of Chicago’s development pipeline going up on a speculative basis climbed from 36% to 55% over the past year, with five spec buildings breaking ground so far this year. Space delivered without a tenant attached lands in the vacancy number on day one, which is why the rate can drift up in a market where nobody is describing demand as weak. Treat the vacancy move as new supply arriving, not as tenants leaving.

Seattle: Vacancy has climbed every month since February, and the docks explain it. Container News reported the Northwest Seaport Alliance handled 4.2% less cargo in July than a year earlier, with full imports down 11.6% for the month. Import-fed storage is the base load for the Kent Valley and the Fife–Sumner corridor, so when the boxes stop landing the racks empty behind them — Seattle now sits at 9.7% vacant against a national 7.6%.

Canadian Markets (Vancouver BC & Toronto ON): Though there were only minor MoM changes to vacancy, Flexe is reporting increases to the Spot Warehousing Index in both markets, driven largely by demand increases that have yet to show up in the lease market. Indications that trade tensions will persist or intensify could make these the tightest markets in North America for warehousing.