Hopes of a freight market rebound in 2025 are still being threatened by the uncertainty regarding tariffs and monetary policy, according to the latest OOIDA Foundation freight market outlook.
In February, the Foundation expressed its concern saying, “these policies could curtail – or even derail – trucking’s recovery.”
Approximately one month later, with volume, demand and rates flat, capacity equalizing and rising operating costs; the Foundation again offered an “uncertain” future outlook.
“Uncertainty has already negatively impacted new orders and inventory levels, which is a headwind for demand,” the Foundation said.
Van market
Demand decreased in five of six regions with the Midwest experiencing the largest decrease of nearly 50%.
Spot rates similarly dropped in all regions.
Sales and inventory ratios were heading in a positive direction, but tariffs might negatively impact this trend.
Household appliances have performed well since late 2023. That might be changing even as furniture wholesalers continue to struggle.
“We’ll have to see what the next couple months bring as a potential trade war is ongoing,” the Foundation said.
Flatbed market
An increase in demand was reported in half of the regions. The Southeast region jumped almost 90%.
For 31 consecutive months, spot rates are down year-over-year.
The seasonally adjusted flatbed composite index fell for the second consecutive month.
A dip in the 10-year U.S. Treasury Yield. as well as higher median price for existing single-family homes presents a headwind for the housing market and freight demand.
Reefer market
Nearly every region saw lower demand led by a 59% drop in the Mountain Central region. Rates were also down across the board.
Volumes are substantially lower than 2019, which is a bad sign for freight demand.
The market continues to be plagued with persistent overcapacity – a headwind for rates.
Trucking market
Private carriers curtailing their growth spree presents a potential silver lining for the for-hire freight market amid recession risk, according to the Cass Shipment Index.
Overall trucking employment numbers are down as are new sales of Class 8 trucks, while used Class 8 sales increased. However, used truck prices are trending down.
Fuel has declined year-over-year for 24 consecutive months.
“The market easily outperformed historical seasonality,” Steve Tam, vice president of ACT Research, said. “The gain is a testament to the stalwart nature of truckers, but also somewhat counterintuitive considering all the economic and political uncertainty they are facing currently.”
The Logistics Managers’ Index showed a slowing of transportation metrics and echoes the Foundation’s belief that tariffs could have a substantial negative impact on transportation markets.
C.H. Robinson said that importers concerned over tariffs have already begun pulling orders forward to keep costs down.
This could lead to soft demand in the future. LL
Read the complete Foundation freight market update here.
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