Trucking operators who hoped freight volumes would rebound in 2025 after three years of soft demand are pushing off their forecasts for a recovery.

The WSJ Logistics Report’s Liz Young writes that the Trump administration’s on-again, off-again tariff policies have led to rapid shifts in import volumes and factory orders that blunted expected growth in shipping demand.

Logistics experts say they expect freight demand to stay relatively flat heading into what is typically the trucking sector’s peak season. Signs of the slowdown are everywhere.

Retailers, manufacturers and wholesalers are holding higher levels of inventory. The Institute for Supply Management said its purchasing managers index of manufacturing activity fell deeper into contraction in May to the lowest level since November. Shipping rates continue to slide following a yearslong pandemic-driven surge in freight demand that drove up prices.

DAT Freight & Analytics, a loadboard matching trucks to shippers, estimated the average contract rate in May was $2.36 a mile, including fuel surcharges, down 7 cents from a year earlier. Average rates in the spot market have fallen more than 9% since the start of the year, according to DAT.

• The Texas Supreme Court ruled in favor of Werner Enterprises, reversing a $100 million verdict against the carrier. (Transport Topics)

The U.S.-China trade war is spurring rapid growth of supply chains outside China. Litesun, a lighting goods supplier to Boston-based Lucidity Lights, is one of about 10 Chinese factories to have sprung up in a village outside Phnom Penh, Cambodia. The WSJ’s Hannah Miao reports the companies are responding to U.S. retailer demands to avoid China tariffs that have in turn caused Cambodia’s goods exports to the U.S. to quadruple in value since 2017.

The extra time it takes to ship parts and materials to Cambodia has added about 30 days to a 45-day production cycle. So Litesun and Lucidity are working to re-create the ecosystem of suppliers that turned China into a manufacturing superpower. For Litesun, Cambodia offers a solution to the challenge of China’s aging and shrinking population and to Beijing’s focus on high-tech industries such as electric vehicles. Cambodia offers young, low-cost labor and room to grow.

• China pledged to approve export applications for rare earths, potentially easing a source of concern for U.S. manufacturers. (WSJ)
• Canada said it is rescinding a digital-services tax in a bid to salvage trade discussions with the U.S. (WSJ)
• British vehicle production fell to its lowest level for May since 1949 because of U.S. tariffs. (Times of London)

American consumer confidence rose in June. (WSJ)

Danish carrier AP Moller-Maersk is resuming service to Israel’s Port of Haifa following a ceasefire between Israel and Iran. (TradeWinds)

U.S. carrier Crowley is launching its first service linking Central America to the U.S. Northeast. (Journal of Commerce)

Maritime Partners entered into an agreement to acquire Centerline Logistics, one of the nation’s largest operators of Jones Act-qualified liquid petroleum barges. (gCaptain)

A man was severely injured when his arm got trapped between two freight rail cars in Lexington, Neb. (Central Nebraska Today)

Five men face charges for the alleged theft of rare sneakers from a Florida warehouse rented by the son of Michael Jordan. (ClickOrlando)

Mark R. Long is editor of WSJ Logistics Report. Reach him at mark.long@wsj.com. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long, Liz Young and Paul Berger.