freight market update Archives

At Spot, we understand the vital role that up-to-date information plays in navigating the dynamic logistics market. Each month, we bring you a comprehensive logistics market update. We dive into the latest trends, challenges, and innovations shaping the logistics sector. Join us as we empower you with the knowledge needed to make informed decisions in this fast-paced industry. Market Update.

Canadian Tariffs Surge: A Hidden Shock

While China has dominated the headlines, Canadian imports are bearing the brunt of new tariffs under the current administration:

•Average monthly tariffs in 2024: $34M
•March & April 2025 tariffs: $660M and $675M, a 19.5x increase
•June is expected to surge again due to 50% tariffs on steel/metal

Top affected categories

•Unwrought aluminum: $123.7M
•Auto parts: $67.5M
•Finished vehicles: $52.2M

Operating Costs: Inflation Without Pricing Power

Stagflation Strains Margins: Carriers face the worst of both worlds, flat volumes and rates paired with rising costs. This stagflationary environment has forced many into cost-deferral decisions that may backfire long term (e.g., delayed maintenance, equipment replacement).

Insurance a Top Pressure Point: Premiums are skyrocketing due to increased litigation and nuclear verdicts (claims >$10M). Carriers are also contending with cargo theft risks, including sophisticated scams like identity manipulation and double brokering.

Supply & Capacity: A Market in Contraction

Carrier Exits Hit New High: In April 2025, 7,474 trucking companies exited the market, a 12-month peak and a 26% increase from March. Weekly revocation rates remain elevated, with more than 1,500 carriers losing authority each week.
New Entrants Defy the Trend: Despite exits, new carrier authorities rose 48% month over month in April. Seasonal optimism and the lure of an eventual rate rebound keep new players entering the market, though many may be underestimating the financial headwinds.

Market Update.

spotinc.com

More Than a Broker

Large blue semi truck driving on an empty road, sunset in the background

Demand Level & Outlook

Where Demand Stands Today

According to trucking ton-mile data, freight demand reached a seasonally adjusted low point in Q2 2024 and has been slowly improving since.

That modest demand recovery, combined with significant carrier exits throughout 2024 and early 2025, helps explain why capacity has tightened even though freight volumes remain historically soft.

To put growth into perspective:

Q3 2025 demand was up just 0.8% year-over-year
Compare that to prior bull markets:
- Q3 2017: ↑ 2.4%
- Q4 2017: ↑ 3.7%

Those past cycles saw rapid demand expansion for 18 months or more. There is currently no evidence of that kind of acceleration heading into 2026.

Supply, Capacity, and Carrier Operating Costs

Capacity & Costs: Tight, But Under Strain

Transportation capacity tightened sharply at year-end. The Logistics Managers’ Index shows capacity fell to a four-year low in December:

Transportation Capacity Index: 36.9
Lowest since October 2021
First contraction since March 2022, when the freight recession began

At the same time:

Transportation utilization rose to 58.2
Transportation pricing increased to 66.7, the highest since January 2025
Pricing sat nearly 30 points above capacity, signaling a tight market on paper

Spot & Contract Market Trends

Contract Rates: Stable, For Now

Contract pricing has been far less reactive than spot markets. Retailers and shippers entered peak season with:

Inventory plans are set months in advance
Elevated inventory-to-sales ratios
A cautious approach to restocking

Post-holiday inventory drawdowns are normal seasonal behavior, not a signal of a Q1 demand surge. With sales largely flat on a price-adjusted basis, there is little incentive for shippers to lock in higher contract rates early in 2026.

Market Update.

spotinc.com

More Than a Broker

Demand Level & Outlook

Where Demand Stands Today

According to trucking ton-mile data, freight demand reached a seasonally adjusted low point in Q2 2024 and has been slowly improving since.

That modest demand recovery, combined with significant carrier exits throughout 2024 and early 2025, helps explain why capacity has tightened even though freight volumes remain historically soft.

To put growth into perspective:

Q3 2025 demand was up just 0.8% year-over-year
Compare that to prior bull markets:
- Q3 2017: ↑ 2.4%
- Q4 2017: ↑ 3.7%

Those past cycles saw rapid demand expansion for 18 months or more. There is currently no evidence of that kind of acceleration heading into 2026.

Supply, Capacity, and Carrier Operating Costs

Capacity & Costs: Tight, But Under Strain

Transportation capacity tightened sharply at year-end. The Logistics Managers’ Index shows capacity fell to a four-year low in December:

Transportation Capacity Index: 36.9
Lowest since October 2021
First contraction since March 2022, when the freight recession began

At the same time:

Transportation utilization rose to 58.2
Transportation pricing increased to 66.7, the highest since January 2025
Pricing sat nearly 30 points above capacity, signaling a tight market on paper

Spot & Contract Market Trends

Contract Rates: Stable, For Now

Contract pricing has been far less reactive than spot markets. Retailers and shippers entered peak season with:

Inventory plans are set months in advance
Elevated inventory-to-sales ratios
A cautious approach to restocking

Market Update.

spotinc.com

More Than a Broker

In the dynamic world of logistics, understanding market shifts and their implications on supply and demand is crucial. In this episode of More Than a Broker, Spot Cofounder Andrew Elsner engages with our Senior National Account Directors, Alex Buening and Theo Mascari, to explore how external factors are reshaping the logistics landscape.

The podcast also addresses the implications of regulatory changes, particularly the English Language Proficiency (ELP) guidelines and the non-domicile driver rule. These regulations have impacted driver availability and capacity, prompting shippers to reassess their strategies. The team discusses how these changes have led to changes in the spot market, affecting the overall supply and demand dynamics.

As the episode concludes, the experts reflect on how the logistics landscape is evolving. They agree that the focus on strategic partnerships with carriers is critical, as companies aim to streamline operations and reduce the number of vendors. The discussion underscores the importance of adaptability in a rapidly changing environment, with technology and regulatory factors playing key roles in shaping the future of logistics.

In summary, the logistics industry is currently navigating a complex landscape influenced by a variety of factors. From market shifts and capacity challenges to regulatory impacts and the need for strategic partnerships, it is clear that staying informed and adaptable is essential for success. As we move forward, embracing technology and fostering strong relationships within the supply chain will be vital in overcoming the challenges ahead.

Logistics Lessons in this Episode:

Rapid Lane Shifts: Customers are demanding extreme flexibility and quickly reassigning lanes due to volatile market conditions.
Technology as Table Stakes: Advanced reporting and technology are now mandatory requirements for securing business partnerships.
Mini Bid Necessity: Mini bids are increasingly used to swiftly cover needs and mitigate risks following carrier failures.
Strategic Partner Consolidation: Shippers are narrowing their focus to fewer, more reliable supply chain partners.
Capacity Constraints: Regulatory changes are consistently impacting driver availability and tightening market capacity.
Structural Market Reset: The logistics industry is experiencing a fundamental structural reset, not just a cyclical recession.
Volatile Spot Rates: Supply constraints can cause freight rates to surge even amidst broader economic slumps.
Evolving Broker Value: The role of the logistics broker is rapidly transforming to meet complex, evolving market demands.
Pricing Optimization: Shippers are actively utilizing variable pricing models to achieve maximum cost efficiency.
Tightening Market Forecast: Future projections anticipate a tighter market environment and potential rate increases.

Demand Level & Outlook

Retail & Manufacturing Impacts

Importers cite persistent geopolitical and regulatory volatility, leading to:

Cautious inventory positions
Delayed orders
Tariff-related cost uncertainty

Manufacturers tied to Chinese imports are particularly strained, with shipments to the U.S. falling over 25% YoY.

Holiday Season 2025 Outlook

Retailers remain well-stocked, preventing shortages, but that is a sign of reduced ordering, not healthy demand and port trackers anticipate the slowest December since March 2023.

Supply, Capacity, and Carrier Operating Costs

Massive Productivity Losses Shrink Effective Capacity

Lost driver time is effectively lost supply:

135.9 million hours lost annually due to detention.
1.2 billion hours lost annually due to congestion.

These productivity losses convert directly into higher operating costs and reduce the effective capacity available in the network.

Tariffs Are Increasing Equipment Costs

New heavy-duty truck tariffs took effect in November. Although less severe than expected, these new policies will increase tractor and parts costs, incentivize reshoring U.S. production, and delay OEM capacity expansions.

Spot & Contract Market Trends

Contract Rates: Stable but Unsustainably Low

Contract rates have been essentially flat since mid-2024, rising only 1% over the last 15 months. Despite this stability, they now sit just 16% above 2019 levels, even though carrier operating costs have increased roughly 33% in that same period.

This creates a widening and unsustainable gap between revenue and expenses for carriers.

Market Update.

spotinc.com

More Than a Broker

Demand Level & Outlook

Industrial & Manufacturing Demand

What’s happening: Industrial production for equipment (like machinery and electrical tools) has fallen 2.2% since April. New manufacturing orders have moved into contraction.
Why it matters: Reduced production means fewer long-haul shipments of machinery and industrial freight.
Tariffs on imported goods and machinery from China are making production more expensive, discouraging new orders.
Impact: Lower freight volumes from manufacturing and industrial sectors, especially for high-value, long-distance loads.

Tariffs & Trade Disruption

What’s happening:
- Goods from China carry a 10% tariff, with an additional 34% delayed until November 10.
- Tariffs on lumber, furniture, and cabinetry are already active.
- Truck parts may face 25–100% tariffs.
- The overall U.S. tariff rate could reach 20% by the end of the year.
Why it matters: Importers front-loaded shipments earlier in the year to avoid tariffs, leaving later volumes lower.
Impact: Softer import-driven freight in the second half of the year, especially at ports and intermodal hubs. Higher costs ripple through domestic supply chains.

Supply, Capacity, and Carrier Operating Costs

Carrier Supply & Market Exits

What’s happening: More trucking companies exited than entered the market in Q3. Trucking employment is down 3.1% from last year.
Why it matters: Small carriers are struggling to absorb higher costs and are leaving the market, reducing total capacity.
Impact: Tightening capacity could stabilize or slightly increase rates even without stronger demand.

Regulations & Labor

What’s happening:
- A new FMCSA rule may remove up to 194,000 non-domiciled CDL drivers.
- Immigration enforcement is leading some drivers to exit the industry.
- Visa rule changes and the drug and alcohol clearinghouse continue to reduce the driver pool.
Why it matters: Fewer available drivers limit capacity, especially in southern and border regions.
- Impact: Tighter capacity raises spot rates in affected regions.

Spot & Contract Market Trends

Overall: The market remains supply-driven, not demand-driven. Freight volumes are flat, but rates are rising slightly due to tightening capacity.
Dry Van: $1.70 per mile nationally, steady but firming in the Midwest and southern border regions.
Reefer: $2.07 per mile, up sharply in Texas border markets due to immigration enforcement.
Flatbed: $2.07 per mile, stable but stronger in the Southeast.
Contract Rates: Mostly flat, with shippers still holding leverage in negotiations.
Impact: Spot rates are rising in certain lanes because of capacity constraints rather than increased demand.

Market Update.

spotinc.com

More Than a Broker

Labor Market

BLS will revise March 2025 employment down by 911k jobs (manufacturing ↓95k, wholesale trade ↓110k, professional/business services ↓158k).
Jobless claims are higher than 2023–2024 but still better than 2014–2016.

Tariff Pressures by Country

India: 25% emergency tariff on top of 25% existing , 87% of India’s exports to the U.S. are impacted tariffs.
Brazil: 40% emergency tariff on top of 10% base.
South Africa: Reciprocal tariffs 31%, metals/steel already facing 50%.
Canada: 35% reciprocal tariffs, especially autos, steel, and inputs.

Tariff-Driven Cost Pressures

Steel & aluminum tariffs increase van trailer prices ↑ 16–28%.
Other heavy-duty trailers (flatbeds, dumps) ↑ 17–30%.
Class 8 trucks & tractors ↑ 15–24%.
Raw material costs overall ↑ 9–12%.
Additional non-USMCA and reciprocal tariffs add 1–6% across segments.
Rising material costs from tariffs are pushing up the price of both trucks and trailers. Fleets are cautious, waiting for clarity before committing to new purchases.

Current Market Signals

Regionally, produce and holiday shipping are creating localized tightness, but it isn’t enough to offset the broader softening.

Seasonal forces are visible. Reefer load-to-truck ratios are elevated (9.26 loads per truck) and flatbed volumes spiked (22.02 loads per truck) with construction, yet both sectors still saw rates fall by $0.03/mile. This shows how trend pressure is overpowering seasonal lifts.

Market Update.

spotinc.com

More Than a Broker

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