Latest news with #TruckloadMarket
Yahoo
10-08-2025
- Business
- Yahoo
Freight demand on shaky footing as import bookings drop
Chart of the Week: Inbound Ocean TEUs Volume Index, Outbound Loaded Container on Rail Index, Outbound Tender Volume Index – USA SONAR: Container import demand (IOTI) has collapsed over the past month, joining the truckload (OTVI) market in posting double-digit year-over-year declines. Intermodal (ORAILL) has remained relatively resilient, but given its close ties to import volumes, it may not be far behind. Uncertainty continues to dominate business decision-making, as companies remain impacted — directly or indirectly — by erratic trade policies and the rhetoric surrounding them. While this market has been anything but predictable, current indicators point to a relatively soft second half of 2025. Let's walk through the supply chain to understand why. Seasons shift The trade war has disrupted traditional seasonal freight patterns, and nowhere is that more evident than in the import sector. Aggressive tariff threats and implementations have prompted shippers to pull orders forward in an effort to avoid higher duties. In April, a 145% tariff on Chinese goods led to a 42% drop in containerized import bookings from China to the U.S. Since China accounts for over 30% of all containerized imports to the U.S., this has had a disproportionate impact on the domestic freight market. This sharp drop in imports had minimal effect on the already deflated truckload market, which has lost most of its long-haul share to intermodal. However, it did noticeably impact intermodal volumes, which were down a modest 5% year-over-year in early June. Once the tariff was paused, ordering resumed at a rapid pace, peaking in late June and early July before falling off again. Traditionally, the peak season for container imports occurs in late July and August as retailers prepare for the holidays. This year, much of that activity appears to have happened one to two months early. What that means for intermodal Intermodal typically peaks in September and October. However, the early surge in imports suggests we could see an earlier-than-usual intermodal peak — particularly for international containers. Still, the latest Logistics Manager's Index (LMI) report offers a counterpoint: inventories are currently being held upstream to avoid the higher costs of storing goods closer to the end consumer. This strategy could lead to a more spread-out or 'diffused' intermodal peak, with international volumes moving earlier and domestic movements occurring closer to the traditional time frame. Several carriers have already announced peak season surcharges for September, which could accelerate some freight movement if capacity allows. The trucking market is likely to continue its slow burn as capacity exits unless demand unexpectedly spikes. For now, consumption remains sluggish, giving shippers ample lead time to manage inventory replenishment. A few wild cards Hurricanes could temporarily disrupt freight networks, but recent years have shown that winter weather events have a more lasting impact. Holiday shipping may be chaotic if shippers are caught flat-footed. The ongoing uncertainty may leave businesses without a clear sense of consumer demand, forcing them into reactive logistics strategies. With leaner networks and less buffer in capacity, even small disruptions could snowball into panic. The broader economy remains the most unpredictable variable. While interest rate cuts, tariff deals, tax breaks, or other incentives could jumpstart investment, a significant economic rebound in 2025 still appears unlikely. About the Chart of the Week The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on for future reference. SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time. The FreightWaves data science and product teams are releasing new datasets each week and enhancing the client experience. To request a SONAR demo, click here. The post Freight demand on shaky footing as import bookings drop appeared first on FreightWaves. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
22-06-2025
- Business
- Yahoo
Carrier revocations overachievement illustrates increasing market vulnerability
Chart of the Week: Carrier Details Net Revocations – USA SONAR: Carrier Net Revocations—which measure how many truckload operators (businesses) are exiting the industry—have remained unseasonably elevated throughout the first half of the year. The current pace of exits is 16% higher than during the same period in 2024. Although new authority issuances have increased this year, they've stumbled in recent weeks as new enforcement behaviors and processes may be creating additional barriers to entry. The U.S. truckload market remains a challenging landscape for many carriers and 3PLs, with demand still too low to support stable business operations. While there has been marginal improvement over the past several years, it hasn't been enough to push rates high enough to support the current level of capacity. Many structural issues persist, raising the risk of capacity falling to critically low levels. Tender rejection rates (OTRI) — which measure how often carriers decline shipper requests for capacity — have been steadily rising since May 2023. This trend indicates declining carrier availability. In weaker markets, carriers are generally more willing to accept freight, so rising rejection rates in a down market carry more weight. Spot rates (NTIL), traditionally used to gauge truckload market health, have followed a similar upward trajectory. However, rates can be a noisy metric, as fluctuations in haul lengths and inflationary cost inputs can distort the picture. While spot rates are flat year-over-year, operating costs have risen—making profitability more elusive. Diesel prices have declined, offering a rare relief. (Note: fuel costs are excluded from the charted rate index.) In May, the president issued new guidance on enforcing english language proficiency at a state level for drivers. While the specifics of enforcement remain unclear, the move could create additional hurdles for new entrants. Additionally, efforts to crack down on CDL fraud have intensified, with stricter vetting processes further raising the bar for prospective drivers. Tender volumes (OTVI) are down approximately 10–15% compared to this time last year. While much of this decline stems from mode shift—particularly in long-haul freight moving to intermodal—recent trends suggest that overall demand may also be softening. Beyond the obvious issue of lower demand undermining core business, inconsistent volume makes it harder for carriers to maintain balanced networks, often requiring months to realign. All these factors point to growing systemic risk in the trucking industry as capacity continues to exit the market. Historically, every major market flip has had a catalyst, but each was preceded by recession-like conditions within the freight space. The 2017 market boom followed a year and a half of softness. The pandemic surge came after a deep freight recession in 2019. Today's downturn is one of the longest and most severe on record. The market may have flipped already if not for supply chain lessons learned during COVID and the broader economic uncertainty. Market inflections are inherently difficult to predict, but the sustained pace of carrier revocations signals that supply is rapidly converging with demand. The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on for future reference. SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time. The FreightWaves data science and product teams are releasing new datasets each week and enhancing the client experience. To request a SONAR demo, click here. The post Carrier revocations overachievement illustrates increasing market vulnerability appeared first on FreightWaves.
Yahoo
26-05-2025
- Business
- Yahoo
RXO Q2 2025 truckload market forecast: Inflation continues but at slower pace
RXO recently released its Q2 Truckload Market Forecast, which found that despite economic turmoil, the U.S. truckload space remained relatively calm according to shippers' KPIs. RXO's Curve forecast reported a 9.1% year-over-year increase in spot rates, a slight drop from the 11.6% growth in Q4 2024. Notably, contract rates grew for the first time since late 2022. FreightWaves' Todd Maiden writes, 'A trend – largely in place since 2023 – of soft freight demand, reductions in carrier capacity and stable rates continued in the first quarter.' 'We're as close to equilibrium, in terms of carrier supply and shipper demand, as we've been in over two years,' the update said. 'Relatively speaking, the capacity situation is much more fragile than at this time last year. With a continued difficult landscape for carriers, and (in many cases) decreasing 2025 contract rates setting in, it could set the stage for volatility later in 2025.' Shippers enjoyed a favorable environment in Q1 with high tender acceptance rates and accessible capacity, despite carriers' grappling with higher costs. According to Corey Klujsza, vice president of pricing and procurement at RXO, the market remained stable throughout the quarter, in line with seasonal expectations. An important Q1 development was the year-over-year growth in contract rates, marking a 1.4% rise from Q1 2024. Typically lagging behind spot rates, these contract rates have finally been lifted out of deflation. RXO analysts argue that the recent drop in inflation does not herald the market's peak. Historical patterns show temporary deviations in market cycles, and typical seasonal trends usually lead to rate retreats post-holidays. Additionally, with operating costs 34% higher than in 2014, significant rate drops remain unlikely. Macroeconomic factors also played a role, with U.S. GDP contracting for the first time since Q1 2022, coupled with trade policy-induced volatility. Import volumes spiked 14.5% in Q1, as shippers preempted new tariffs, but they have begun to decline in Q2. Looking ahead, Q2 is expected to bring typical seasonal volatility due to produce season and Memorial Day influences. However, significant rate increases remain unlikely without sustained higher demand. Supply constraints, particularly from carrier attrition, could cause future inflation. The U.S. Senate voted on Thursday to repeal a waiver granted to California by the Biden administration that required a large part of the trucking industry to achieve zero-carbon emissions by 2035. FreightWaves' John Gallagher writes: 'The nullifications of California's Advanced Clean Truck (ACT) and Low NOx Omnibus rules, accomplished through two Congressional Review Act resolutions, have already been adopted by the House of Representatives. They head to the White House where they are expected to be signed by President Donald Trump.' For the American Trucking Associations, it was a big win. The ATA had argued in a letter to Congress in April that if the California ACT regulation were allowed to move forward, 'Beginning with the 2024 model year, the Advanced Clean Trucks (ACT) regulation mandates that manufacturers progressively increase zero emission vehicle (ZEV) sales, aiming for 55% of Class 2b-3 vehicle sales, 75% of Class 4-8 vehicle sales, and 40% of Class 7-8 tractor sales to be ZEVs by the 2035 model year.' In a rare moment of agreement, the Owner-Operator Independent Drivers Association lauded the move, saying, 'For OOIDA members, vehicle reliability and affordability are critical. It's no wonder small-business truckers have left the state in droves to find better opportunities elsewhere.' This comes as some states are opting for a low-CARB diet, according to a recent article from Fleet Owner. Several states that originally voted to adopt California's Advanced Clean Trucks EV sales mandate are now rolling back or pushing out the enforcement dates. CARB is the environmental regulator California Air Resources Board. Fleet Owner reports Maryland, Massachusetts, Vermont and Oregon pushed back their compliance timelines for ACT by a year or more. For model year 2025, New Jersey, New York and Washington are on track while Colorado, New Mexico and Rhode Island begin enforcement for model year 2027. The post RXO Q2 2025 truckload market forecast: Inflation continues but at slower pace appeared first on FreightWaves.
Yahoo
01-03-2025
- Business
- Yahoo
RXO Q1 forecast: 2025 upswing will feel more like 2014 than 2021
RXO recently released its Q1 2025 Truckload Market Forecast, with its Curve Index showing a continuation of rate inflation first observed in Q4 2024. The Curve, formerly the Coyote Curve, is a proprietary index measuring year-over-year changes in truckload linehaul spot rates, excluding fuel. The forecast highlighted how rising spot rates and capacity exiting the market are driving the upswing, though the authors caution that the extreme conditions of the last inflationary market in 2020 and 2021 are not expected. While shippers may not feel dramatic changes yet, RXO warns that conditions are shifting in ways that could lead to tightening later this year. The Q4 2024 Curve Index showed spot rates up 11.6% year over year, a jump from the 5.8% increase in Q3. This rise was driven by continued carrier exits, impacts from hurricanes Helene and Milton, and typical holiday shipping seasonality. Contract rates, while still showing a slight year-over-year decline of 1.5% in Q4, moderated from the 3.4% y/y drop seen in Q3. This aligns with typical market behavior, as contract rates tend to lag spot rates by two to three quarters. 'Over the holidays, we saw market rate and coverage KPIs reach levels we haven't hit since Christmas 2022. While we have seen some of those gains moderate through the first quarter to date, the baseline has reset higher,' said Corey Klujsza, vice president of pricing and procurement at RXO. 'Though the rest of 2025 may not look like the peak in the COVID-era truckload market, we're seeing continued signs that we're past the bottom of the cycle.' Read the full article here. The trucking industry may see an unexpected boost later this year as inflation reshapes consumer spending habits, according to Bob Costello, chief economist of the American Trucking Associations. Costello spoke at the 2025 Recruitment & Retention Conference in Nashville, Tennessee, Transport Topics reported, on how current economic trends could influence freight demand. He says that as consumers face sticker shock from inflated costs of flights and accommodations, they might redirect their spending. 'They might start buying goods again, and that could help trucking,' he added. However, Costello cautioned against overreliance on GDP growth as an indicator of trucking prosperity. 'About 70% of what is embedded in GDP are services, and you are not putting services in a trailer,' he pointed out. On the housing front, Costello painted a mixed picture. While demand for housing remains strong, high interest rates have sidelined many potential buyers, impacting dry van and flatbed carriers that haul residential construction supplies. 'If your company hauls residential construction supplies, it's been tough,' he acknowledged. Adding complexity, Costello noted concerns about the availability of construction labor, partly due to recent immigration policies. In contrast, nonresidential construction has shown promise. 'This is on the rise — it's been quite good,' he said, pointing to infrastructure projects and semiconductor plant construction as bright spots for trucking demand. Costello forecasts modest growth in trucking demand for the year. However, he warns of a potential shakeout in capacity as companies that expanded during the pandemic boom times reassess operations. 'I think people got ahead of themselves and thought the recovery was coming sooner, and it wasn't. … 'Fleets are saying this is the worst downturn they can remember.' ACT Research recently released its seasonally adjusted final January Class 8 order numbers, which showed still-healthy tractor orders despite lower year-over-year comps. Vocational truck demand was also strong. Carter Vieth, research analyst at ACT Research, wrote, 'Tractor orders totaled 18.4k units, down 11% y/y. It remains to be seen whether the decrease in orders this month will continue or was just a reversion after November and December highs. One month does not make a trend.' According to FTR Transportation Intelligence, preliminary North American Class 8 net orders in January totaled 24,000 units, representing a 28% decrease month over month and a 15% drop year over year. This figure fell short of the seven-year January average of 27,950 net orders. FTR notes the on-highway segment primarily drove the softening in order activity, while vocational orders remained relatively stable. Despite the January dip, cumulative net orders from September 2024 through January 2025 for builds in 2025 still show a 3% increase from the previous year. Dan Moyer, senior analyst, commercial vehicles at FTR, said, 'A 25% U.S. tariff on imports from Canada and Mexico – currently paused for trade negotiations through early March – and a 10% tariff on Chinese imports as of February 4 could significantly increase costs for North American Class 8 trucks and parts if fully implemented and enforced indefinitely.' Another challenge is the potential tariff impacts on the interconnected Class 8 OEM truck makers' supply chains. Moyer added, 'With roughly 40% of U.S. Class 8 trucks built in Mexico and around 65% of Canada's Class 8 trucks built in the U.S., tariffs and likely counter-tariffs threaten to disrupt supply chains and drive up vehicle prices.' Summary: Despite ongoing deterioration in the dry van space, spot market and outbound tender rejection rates are outperforming compared to seasonal year-over-year comps. The past week saw the SONAR National Truckload Index 7-Day average rise 2 cents per mile all-in from $2.28 on Feb. 17 to $2.30. Spot rates are down 13 cents per mile m/m from $2.43 on Jan. 25, but when compared to last year, NTI is up 7 cents per mile from $2.23. Spot market linehaul rates saw a smaller increase, up from $1.72 to $1.73 per mile w/w. Fuel costs are based on the average retail price of diesel fuel and fuel efficiency of 6.5 miles per gallon. The formula is NTID – ( Linehaul rates saw a similar decline compared to all-in spot rates, with the NTIL down 13 cents per mile m/m from $1.86 and 13 cents per mile higher y/y from $1.60. Dry van outbound tender rejection rates posted a slight decline, down 15 basis points w/w from 5.18% on Feb. 17 to 5.03%. VOTRI is down 150 bps m/m but 86 bps higher y/y. A challenge for dry van carriers is that despite the higher outbound tender rejection rates on y/y comps, outbound tender volumes are low. ATRI Invites Motor Carriers to Participate in 2025 Operational Costs Data Collection (ATRI) Low pay keeping millions of Americans out of trucking, survey suggests (Land Line) Trump's Threat to EV Trucking Rules Undermines Big-Rig Bets (Bloomberg) Truckstop exec joins Trucking Parking Club to boost ties with enterprise fleets (FreightWaves) BMO's numbers on trucking credit suggest worst may be over (FreightWaves)Werner pilots sideview cameras for safety, legal protection (Trucking Dive) The post RXO Q1 forecast: 2025 upswing will feel more like 2014 than 2021 appeared first on FreightWaves.
