There’s a lot to digest in this week’s data, including a surprise boost in trailer order activity, but continued projections for weakness in the freight market.
The spot market underwhelmed in June and just saw one of its sharpest drops in rates in several years last week.
And demand for new trucks is also expected to remain soft, even in the vocational segment that entered the year with big expectations.
Freight market in ‘stasis’
A new report from AFS Logistics and TD Cowen paints a Q3 picture of an industry in “stasis, mired in prolonged low demand as businesses wait to see how evolving trade policies unfold.”
It draws on data that show 10 straight quarters of depressed truckload pricing, while LTL carriers manage profitability on weak volumes.
“Despite plenty of international travel by world leaders, trade policy remains an unsettled picture and businesses are opting for a wait-and-see approach and delaying spending decisions,” says Andy Dyer, CEO, AFS. “With no catalyst to ignite demand, some carriers are buckling under the pressure of unrelenting low volumes while others are deploying all available mechanisms to capture revenue.”
The companies project rates will remain at or near bottom in Q3, down slightly quarter over quarter. Excess capacity continues to suppress truck rates, the report says.
Meanwhile, LTL carriers are managing soft demand with a focus on tightly managing revenue. The report suggests weight per pound of LTL shipments is down, but revenue per shipment less so.
“While there’s some evidence that the steady decline we’ve observed in weight per shipment is in part driven by mode shifting, it’s also indicative of a simpler reality — carriers moving lighter pallets because of soft LTL demand,” says Aaron LaGanke, vice-president, Freight Services, AFS. “The continued resilience of the rate per pound index shows the effect of carrier pricing discipline.”
Trailer orders jump unexpectedly
Preliminary net trailer orders jumped by nearly 8,800 units from May to June, reports ACT Research, marking a 133% month to month increase. Nearly 15,400 trailers were ordered in June, which was also up 144% year over year.
“Lower June net order intake was expected, as it is one of the weaker order months of the annual cycle, so June data surprised to the upside. That said, OEMs have been sharing for the past several months that amid the lower order placements, they have seen a flurry of quotation activity,” said Jennifer McNealy, director commercial vehicle market research and publications at ACT Research.
“While speculative, we suspect this may be a pull-forward of demand in advance of anticipated price increases. And although this is good near-term news, supporting build rates in 2025, concern remains that weak for-hire carrier profitability continues to be an ongoing challenge to stronger demand.”
ACT is standing by projections for a weak year in trailer order activity.
“With weak for-hire truck market fundamentals, low used equipment valuations, relatively full inventories, high interest rates, and the ambiguity of policy shifts still in play, ACT’s expectations for subdued build and order intake levels during 2025 remain intact,” McNealy said. “Additionally, preliminary data show cancel rates continue to be elevated, and in aggregate our standard notice that one month’s data does not make a trend is worth reiterating.”
Tractor demand also to remain soft: ACT
In its North American Commercial Vehicle Outlook, ACT Research predicted Class 8 demand will remain soft due to ongoing soft freight market conditions and pressures on carrier profitability.
“The publicly traded for-hire fleets, whose balance sheets we have tracked for over three decades, saw their weakest net income margins since Q1 2010 in Q1 2025. With freight rate growth lagging the rate of inflation last quarter, there is no expectation that margins improved much in Q2,” explained Kenny Vieth, ACT’s president and senior analyst. “Private fleets have spent the past two years adding to fleet capacity, and we believe they have little need for additional supply, especially given significantly upside-down cost economics.”
The weakness has extended to the vocational market, Vieth added, where “worsening housing and construction markets and regulatory uncertainty have sapped strength that looked all but certain at the beginning of the year.”
Spot market rates retreated in June
The news was no better on the U.S. spot market, where DAT Freight & Analytics reported weaker rates in June. The DAT Truckload Volume Index – a measure of loads moved in the month – shed its May gains, with van loads down 2%, reefer down 5% and flatbed ticking up 1%.
“Many retailers and manufacturers continued to hold inventory at current levels or allowed it to draw down,” noted Ken Adamo, chief of analytics at DAT. “Freight moved in fits and starts rather than steadily and predictably building toward the July 4 holiday.”
Rate growth also stalled in June. Van rates climbed 3 cents/mile from May, reefer rates ticked up 1 cent/mile and flatbed rates were flat for the third straight month.
There remains too much capacity, DAT notes.
“Higher fuel prices and the enforcement of English-language proficiency requirements for truck drivers had minimal impact on carrier exits in June,” said Adamo.
And it gets worse…
Truckstop.com and FTR Transportation Intelligence indicate spot market rates fell sharply in the week ended July 11.
This followed a week in which both dry van and reefer rates saw an unusually large increase. Last week spot rates for both equipment types fell by the most during a comparable week since 2014, Truckstop.com confirmed. Flatbed rates also dropped sharply.
But load postings rose, pulling the Market Demand Index to 95.6, its strongest reading in eight weeks.
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