One U.S. warehouse no longer covers North America. Cross-border operators are splitting inventory into dual U.S.-Canada networks because rapidly shifting tariffs have made single-node fulfillment a margin risk, according to James Edge, CEO of Cross Border at Bnode and chairperson at Landmark Global.

Edge, who works daily with retailers moving goods across the border, said the hardest part of 2025 isn't the tariffs themselves. It's the unpredictability. "The changing tariffs and the management of those tariffs makes it difficult to do that cross-border shipment," he said in a FreightWaves interview.

How shippers are restructuring

One client planned to serve both markets from a single U.S. warehouse. Tariffs hit, the math broke, and the plan changed. "We helped them set up a second Canadian warehouse," Edge said. Bulk importing into Canada lowers the effective tariff on individual orders, so Canadian orders now ship domestically while U.S. orders run out of the American facility.

It's a dual-node model Edge said many others are replicating. The commercial logic is blunt: every policy shift forces a margin recalculation.

"If an additional tariff means $5 extra, is that all of your margin, or do you have some room to play? That's the math that's going on," Edge said.

What does this change for sourcing?

Plenty. Brands heavily reliant on Chinese manufacturing are evaluating Vietnam, Turkey, and Bangladesh to cut tariff exposure. That's a slower, costlier move than adding a warehouse, but the direction is clear: diversify or absorb.

Retailers also need rigorous data hygiene — country of origin, product identifiers, materials composition — because compliance requirements are shifting alongside tariff policy. Sloppy data now carries a price beyond paperwork. Customs documentation errors can delay or seize shipments outright.

Demand is sagging northbound

Then there's the sentiment problem. Canadian television is running commercials promoting domestic buying alternatives, dampening demand for U.S.-origin goods shipped north. Edge described the surge in Canadian nationalism as genuinely new.

"It takes a lot to get the Canadians riled," he said, calling the current friction between the two countries unprecedented in his experience. A buy-local ad campaign is the kind of headwind no routing guide anticipates.

AI classification, human clearance

On the technology front, Edge said AI-assisted customs classification now achieves success rates "in the upper 90s" — up from roughly 80% with earlier machine-learning tools. That's a real leap in accuracy for the documentation layer.

But the physical clearance process, including direct interaction with government agencies, remains firmly human. Over-automate at your peril; a seized shipment costs more than a classifier's bragging rights.

The road ahead

Edge expects tariff volatility to gradually stabilize into something manageable, even if final rates land higher than most importers would prefer. The geopolitical dimension, he conceded, is harder to forecast.

His advice for brands bracing for the next shift: get product data — origin, materials composition, classification — fully in order, and align with logistics partners who can handle compliance requirements in real time. In a market where the rules change faster than the rate quotes, clean data is the cheapest insurance going.

• Dual U.S.-Canada warehouse networks are becoming standard practice for cross-border retailers managing per-order tariff exposure.
• AI classification accuracy in the upper 90s versus roughly 80% for earlier ML tools — but physical customs clearance still needs humans.
• Rising Canadian nationalism and "buy Canadian" campaigns are suppressing northbound demand from U.S. origins.