The Canadian spot market was soft overall in July, but southbound loads spiked, creating some opportunities for cross-border carriers.
ACT Research warns of more tariff-related air pockets ahead, and notes Class 8 production will be scaled back in the latter half of this year.
And in the U.S., spot market van rates fell while reefer carriers saw a pay bump.
Southbound loads see spot market jump
Loadlink Technologies reported that southbound loads spiked in July, while overall loads dropped 3% from June and were off 14% year over year.
Loads from Canada to the U.S. surged 61% in July, Loadlink reported, but the spot market was otherwise soft. Inbound loads to Canada fell 36% from June and were down 31% year over year.
“We don’t see this kind of outbound shift every month. Carriers and brokers are already tweaking how they operate to take advantage of it. When there’s more freight moving on these key lanes, it’s an opportunity to increase margins. July’s numbers really show what’s possible if you adjust to the market,” said James Reyes, general manager at Loadlink Technologies.
There were signs if tightening capacity, with equipment postings for outbound cross-border loads down 29% year over year.
Domestic freight jumped 10% from June but was down 5% year over year. The truck-to-load ratio climbed to 3.83, up 14% from June but tighter than last July’s 4.06 reading.
Air pockets ahead
ACT Research warned this week in its Freight Forecast: Rate and Volume Outlook report that there are likely additional trade-related air pockets in the coming quarters.
And tariffs are also affecting equipment prices and production, with ACT projecting Class 8 production will fall more than 25% in the second half of the year.
“As the economy is likely to absorb the effects of tariffs over the next several months, our freight demand outlook remains cautious,” said Tim Denoyer, ACT Research’s vice-president and senior analyst. “But the silver lining of lower vehicle production and lost manufacturing jobs is that tighter capacity will likely drive freight back to the for-hire market in the future. As goods prices rise, lower unit demand may loosen market equilibrium for some time before the effects start to support freight rates, and we see a soft holiday shipping season.”
Improving freight conditions in July
ACT Research reported in its latest For-Hire Trucking Index that the supply and demand balance improved in July, as freight volumes grew and capacity declined.
Its Volume Index turned positive for the first time in six months, potentially due to a pull-forward of shipments ahead of August tariff deadlines.
“Consumer spending continues to outpace inflation, but consumers have so far been insulated from price increases, as tariff costs have yet to be fully passed on to the consumer,” said Carter Vieth, research analyst at ACT Research.
“This won’t last much longer, as retailers have been raising prices in recent weeks, and with producer prices rising, passthroughs seem set to rise soon. On the positive side, several recent signals suggest the private fleet insourcing phenomena may be starting to reverse.”
Capacity decreased in July, something Vieth said may be a result of carrier downsizing amid a continuing weak freight environment.
“Publicly traded TL carriers’ profit margins remain near to the lowest levels since 2010, and on top of that, steel, aluminum, and parts tariffs have added thousands to the cost of a tractor. As a result of challenging operating conditions, trade/economic uncertainty, and equipment cost increases, many fleets are opting to significantly reduce capital spending in 2025,” he said.
Shippers hit with higher fuel costs
FTR’s Shippers Conditions Index fell sharply to -3.6 in June, largely due to a spike in fuel prices. The June reading reflected the toughest conditions for shippers in three years.
“The freight market still looks soft well into next year but not quite as soft as it did a month ago,” said Avery Vise, FTR’s vice-president, trucking.
“While that’s not great news for shippers, it’s not really bad news, either. Still, the range of possibilities remains broad due to an uncertain impact from recent tariff hikes potentially offset by a boost in activity due to lower financing costs and July’s enactment of tax cuts. Another wild card is capacity, which has been surprisingly resilient but might not be able to withstand rising insurance costs and other cost and regulatory pressures.”
U.S. spot market settles into seasonal patterns
Truckstop.com and FTR Transportation Intelligence noted diverging spot market rates for the week ended Aug. 22, in line with seasonal expectations.
Dry van rates dropped to their lowest level since mid-May, while refrigerated load rates climbed for a fourth straight week, reaching their strongest mark in seven weeks.
“Spot load volume remains very strong compared to the same period in 2024. The forecast for this week predicts higher rates for dry van and refrigerated loads due to Labor Day-related factors,” Truckstop.com said.
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