There’s been a shift in the future freight market outlook, according to the latest OOIDA Foundation market update.
In its January analysis, the Foundation was neutral in regard to the freight market, with signs of an upcycle more and more prevalent.
A freight market upcycle could begin as soon as late in the first quarter of 2025, according to the OOIDA Foundation’s January freight market update. 🚛
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The Foundation’s February update attaches a level of uncertainty to that outlook and expresses concern.
“The next upcycle appears on the horizon. However, tariff and monetary policies could curtail – or even derail – trucking’s recovery,” the Foundation told Land Line in late February.
Read the full Foundation freight market update online.
From an overall perspective, volume/demand is flat, capacity is equalizing, rates are rising and operating costs are stabilizing, according to Foundation’s February market update.
Below is a breakdown by specific market.
Van market
All regions saw a demand in the market demand index, with the largest increase in the Midwest.
The spread between the spot rate and the three-year moving average is expected to hit parity in the next month or two. Tariff policies could negatively impact potential recovery.
Sales and inventory ratios are heading in a positive direction, but furniture wholesalers continue to struggle.
Seasonally adjusted retail sales decreased for two of the three advanced retail sales sectors.
Flatbed market
Demand was higher in five of the six regions. The South Central region saw the largest increase.
The flatbed composite index fell after two consecutive months of increase.
A headwind appears to be present in the housing market.
Building materials, garden equipment and supplies dealers continue to struggle with high inventory levels.
Those levels are 11% higher than 2019 levels.
Reefer market
Demand increased by the widest margin in the Mountain Central region.
The spot rate spread crossed into positive territory for the first time in 25 months. Tariffs could delay or change the next upcycle.
According to USDA, carriers in the Mexico-Texas region experienced the greatest increase in pay per mile month-over-month.
While volumes increased in January, they are still lower than 2019 levels.
Capacity levels were still mixed across the country.
Trucking market
“Perhaps the most important takeaway this month is that while volumes remain soft, capacity has adjusted enough to result in modestly higher rates,” the Cass Shipment Index said. “In addition to tariffs, this could be a key theme of 2025.”
Truck employment overall increased, but specialized freight trucking and long distance remained flat month-over-month.
Used truck sales outpaced typical seasonal patterns.
The Logistics Managers’ Index indicated a stronger position for carriers.
Average fuel prices have declined $2.12 per gallon since a high of $5.75 in June 2022.
Preliminary used truck prices have now been negative for 26 months but are moving closer to positive.
“Intermodal pricing is expected to climb in the low, single-digit range through 2025,” C.H. Robinson said. “Intermodal spot rates remain depressed, reflecting the current truckload market.” LL
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