‘ Not bad, but not improving’

Tariff uncertainty casts shadow on US trucking demand, pricing

By William B. Cassidy

After a nearly three-year downcycle, the US trucking industry is on a slow road to recovery in terms of rates. But that road is getting harder to see through the economic fog.

The potential impact of US tariffs on businesses and consumers and even renewed concerns about a possible recession are shaking recent freight market optimism.

Truckload rates may be rising on a year-over-year basis, but not quickly. And freight demand remains weak for both truckload and less-than-truckload( LTL) carriers. Some analysts believe demand could rise and rate gains could accelerate as early as the second quarter, while others expect improvements will be delayed until the second half, or even 2026.

“ The consumer remains relatively resilient, and we think we’ re in the early innings of restocking.”

“ We were pretty optimistic going into 2025, but we’ ve become less optimistic,” said Lee Klaskow, senior analyst for transportation and logistics at Bloomberg Intelligence said during the Journal of Commerce’ s TPM25 conference in Long Beach.

“ The sky isn’ t falling, but there is hail out there,” Klaskow said as the Trump administration began implementing tariffs on Mexico, Canada and China.

“ What’ s going on in Washington will have significant effects on consumers because it is going to be inflationary, assuming the tariffs are implemented,” he said.

The White House has implemented tariffs while postponing import taxes on some commodities and industries. The list of prospective tariffs is still expanding.

The tariffs, even when postponed, are creating supply chain disruption as US importers try to pull goods, including manufacturing inputs, into the US ahead of tariff deadlines.

Avery Vise, vice president of trucking at FTR Transportation Intelligence, calls those tariff-related disruptions“ distortions” that must be considered when forecasting.

“ We do expect the market to improve over the next year, but we have to take out all the potential distortions until we can get more data,” Vise said.

48 Journal of Commerce | April 7, 2025

Rapidly increasing spot truckload rates in lanes between the US and Canada are among those distortions, as are delays in getting imports from Mexico into the US.

FTR has forecast that truckload rates will rise 3 % in 2025, after falling 2.5 % last year, with spot rates rising 6 % and contract rates increasing 2 %.

“ It’ s not a bad market for carriers, but it’ s not improving yet,” Vise said.“ I would venture it’ s not likely to accelerate unless we see some stronger data than we’ re seeing.”

Even Norfolk Southern Railway( NS), which competes with truckload rates to capture intermodal business, has

Rising US manufacturing PMI outperforms global indexes

Seasonally-adjusted world, US, Asia, China and EU manufacturing Purchasing Managers ' Indexes( PMIs); a reading of 50 or higher indicates growth

PMI

56 54 52 51

30 50

48 46 44 42

L Jul Jan 2024 Jul Jan Feb 2025,

Source: S & P Global

World US Asia China EU

April 7, 2025 | Page 48

‘ Not bad, but not improving’