How New Tariffs Are Fueling a Surge in Customs Fraud

There’s a lot happening behind the scenes with all these new U.S. tariffs — and it’s not all good news. With sharp spikes in import taxes, the risk of customs fraud is climbing fast. Freight companies, brokers, and importers are now facing bigger penalties under the False Claims Act if they knowingly underreport goods or misrepresent shipments to dodge these new costs.

Even though customs fraud wasn’t a major focus in the past, experts are now seeing a steady rise. The Justice Department just reported more than $2.9 billion in fraud settlements and judgments for 2024 alone. What’s even more eye-opening? A record number of whistleblower lawsuits, called qui tam actions, were filed last year — 979 cases, the highest ever recorded. These whistleblowers are often the ones bringing hidden fraud into the spotlight, and the government is rewarding them with a portion of the recovery.

With Customs and Border Protection (CBP) vowing to aggressively enforce the new tariffs, even companies that are just “in the supply chain” — like carriers, warehouse operators, and brokers — could get pulled into investigations. It’s not just about who commits fraud; it’s about who touches the shipments and paperwork along the way. Being associated with a bad actor can mean being subpoenaed, dragged into court, or spending time and money to prove your company stayed clean.

The False Claims Act is serious business — if someone knowingly submits false information to the government, they can be hit with triple damages, steep fines, and public exposure. With so much rapid change happening in tariffs, trade routes, and customs enforcement, now is the time for logistics partners to be more careful than ever about who they work with and how they document their shipments.

To learn more about the False Claims Act and how it protects taxpayer money, visit: justice.gov/civil/false-claims-act.

➡️ See a full breakdown of fraud recoveries from 2024, including key numbers by sector and a year-over-year comparison below.

Drayage Providers Brace for Volume Drop as Trade Disputes Disrupt Supply Chains

U.S. drayage providers are preparing for a sharp decline in container volume this May, particularly on the West Coast, as canceled bookings and blanked sailings begin to ripple through the supply chain. The sudden drop comes after a rush of early 2025 freight pushed through ahead of tariff increases, especially from China. With frontloaded cargo now arriving and new orders paused, the drayage market is entering what many expect to be a three- to four-week lull—possibly longer.

Major providers are already seeing double-digit drops in container moves and are adjusting equipment placements in anticipation of broader slowdowns reaching inland hubs like Chicago and Kansas City.

At Southern Star Navigation, we’re closely monitoring this shift and helping clients prepare for both the slowdown and what’s expected to be a strong rebound later this year. The market remains unpredictable, but one thing is clear: strategic planning with drayage partners is essential right now. As capacity tightens and volumes fluctuate, businesses that stay informed and agile will be better positioned to avoid disruptions and respond quickly when demand returns.

New Executive Order Reinforces English Proficiency for Commercial Drivers

The Trump Administration has announced new steps aimed at improving safety on America’s roads. A new Executive Order requires that anyone operating a commercial vehicle must be fully qualified and able to communicate in English. The goal is to make sure drivers can understand traffic signs, follow instructions at border checkpoints, and interact with safety officers during inspections. The Department of Transportation is being directed to strengthen enforcement, tighten license rules, and place drivers out-of-service if they fail to meet English standards. This move is part of a broader effort to ensure professional drivers are properly trained and that roadway safety improves across the country.

The Executive Order also supports American truck drivers by focusing on better working conditions and stronger safety rules. In recent years, trucking accidents have been on the rise, and officials believe a lack of enforcement on English proficiency has played a part. The Administration is taking action to reverse this trend by holding drivers and licensing authorities accountable. This update reinforces that English proficiency is not just a preference—it’s a national safety standard.

Trans-Pacific Shipping Adjusts Amid Decreased Chinese Exports

Ocean carriers are reducing vessel capacity on the trans-Pacific route due to a significant drop in exports from China. This shift is a response to recent U.S. tariffs, leading to a decrease in cargo volumes. As a result, carriers have implemented blank sailings and suspended certain services to align with the reduced demand. For instance, Zim Integrated Shipping Services and Mediterranean Shipping Co. have collectively removed approximately 100,000 TEUs from the trade lane in April.

In contrast, U.S. importers are increasingly sourcing goods from Southeast Asian countries like Vietnam and Thailand. Bookings from these regions have risen, indicating a strategic shift in supply chains. However, this transition may lead to longer transit times and potential delays as carriers adjust their operations. The ongoing changes underscore the dynamic nature of global trade and the need for adaptability in logistics planning.

E-Commerce Air Cargo Drops as $800 Duty-Free Exemption Ends

Air cargo volumes between China and the U.S. have dropped sharply ahead of the May 2 policy change eliminating the de minimis exemption for goods under $800. The rule change, which targets low-value shipments from China and Hong Kong, has already impacted major platforms like Temu and Shein, with many of their U.S. prices increasing. As a result, freight forwarders are reporting a significant dip in e-commerce air shipments, with some carriers even suspending charter flights. While some expected a last-minute shipping rush before the policy took effect, the slowdown shows many shippers are pausing until there’s more clarity on future tariff negotiations.

At Southern Star Navigation, we’re closely monitoring how these policy shifts are shaping demand patterns, especially for clients relying on air freight from Asia. Although volumes from China are down, shipments from Southeast Asia — including Vietnam and Thailand — have been holding strong. Our team specializes in international shipping and compliance and would be happy to help review your supply chain to identify alternative routing, mode adjustments, or strategic warehousing solutions that keep your cargo moving smoothly despite the regulatory headwinds.

White House Eases Auto Tariffs to Support U.S. Manufacturing

On April 29, 2025, President Donald Trump signed an executive order aimed at reducing the impact of recent auto tariffs on U.S. automakers. The order introduces a rebate system allowing manufacturers to offset up to 15% of the tariffs on imported auto parts for vehicles assembled domestically, decreasing to 10% in the following year.

Additionally, the policy ensures that vehicles and parts compliant with the United States-Mexico-Canada Agreement (USMCA) are exempt from overlapping tariffs, such as the 25% duties on Canadian and Mexican goods and the 10% duties applied to most other countries. This move is designed to encourage domestic production while providing relief to automakers navigating complex global supply chains. At Southern Star Navigation, we understand the challenges these tariff adjustments pose to importers and manufacturers. Our team specializes in navigating international trade regulations and can assist in evaluating how these changes affect your operations. Whether it’s assessing updated tariff exposure or reviewing your international sourcing strategies, we’re here to help you adapt as trade policies continue to evolve.

Protect Your Business: Using Incoterms® to Manage Tariff Risks

In today’s fast-changing world of tariffs and trade policies, knowing who is responsible for paying duties at the border is more important than ever. That’s where the Incoterms® 2020 rules come in. These internationally recognized rules, developed by the International Chamber of Commerce (ICC), spell out exactly which party — the buyer or the seller — pays the tariffs and handles customs clearance when goods cross borders.

One of the biggest insights? Under most Incoterms®, the buyer is responsible for paying tariffs. The only exception is DDP (Delivered Duty Paid) — where the seller takes on all costs and risks, including duties, taxes, and import formalities. Choosing the right Incoterm can protect your business from surprise expenses, delayed shipments, or even contract disputes when tariff rates suddenly change.

If your contracts don’t clearly spell out tariff responsibilities, you could be stuck with unexpected costs. Using the right Incoterm isn’t just about logistics anymore — it’s about smart risk management. It’s a small detail that can make a huge difference, especially with today’s global tariff volatility. Need help picking the right Incoterm® for your next shipment? Check out our full guide here: southernstarnavigation.com/incoterms-2020-guide

Norfolk Southern Cuts International Rail Service on Key East Coast Lanes

Norfolk Southern will end international intermodal service on over 20 East Coast routes beginning May 31, including the Port of Virginia to Memphis and Chicago to Jacksonville corridors. The decision stems from low container volumes that made the service unsustainable, particularly as shippers opted for alternate routes through Charleston and Savannah. The railroad emphasized that these changes are part of a broader strategy to reallocate resources toward higher-growth corridors. Service to Puerto Rico will also be impacted, as the discontinued Chicago–Jacksonville Lane played a key role in Jones Act container moves via Crowley, Tote Maritime, and Trailer Bridge.

While some international shippers may shift to CSX where available, the reduction in rail options could disrupt intermodal planning for certain trade lanes, especially for clients relying on cost-efficient inland routing. At Southern Star Navigation, we’re closely monitoring these changes and working with our partners to identify alternate routing solutions and port options. Our goal is to help minimize delays and keep your international cargo moving efficiently as the rail landscape continues to evolve.

Marine insurance is crucial for businesses involved in shipping goods internationally. It provides comprehensive coverage that safeguards shipments against various risks and uncertainties during transit by sea, air, or land. This type of insurance is essential for ensuring that businesses can recover financial losses from potential damage or loss of cargo.

Importance of Marine Insurance:

• Protection Against Financial Loss: Covers the cost of goods lost or damaged during transit, ensuring businesses do not bear the financial burden alone.
• Risk Management: Helps manage and mitigate risks associated with transportation, including natural disasters, accidents, and piracy.
• Peace of Mind: Provides reassurance that goods are protected, allowing businesses to focus on operations without worrying about potential losses.
• Legal Compliance: Often a requirement in international trade contracts, ensuring that businesses meet legal and contractual obligations.
• Comprehensive Coverage: Includes protection against various risks such as theft, fire, and other perils specific to maritime transportation.