April 7, 2025 | Page 49

Surface Transportation

acknowledged the stubbornly tepid market for carriers.

“ The intermodal side is so truck-competitive and we don’ t have any kind of significant rebound built into our plan,” NS CFO Jason Zampi said during the J. P. Morgan Industrials Conference.

Searching for‘ triggers’

The pace and extent of trucking’ s recovery is important to shippers trying to plan their transportation budgets for 2025 and beyond in an uncertain market.

US truckload spot rates stuck in neutral

Average US truckload spot rates, in USD per mile, excluding fuel surcharges

USD average rate per mile

$ 3

$ 2.5

$ 1.0 2.0

$ 1.5

$ 1.0 L Jul Jan 2024

Jul Sep, 2024 Jan 2025 Dry Van Flatbed Refrigerated

tilialucida / Shutterstock. com

Shippers have told the Journal of Commerce they approached 2025 expecting an inflection in demand and pricing— one they thought would take place in 2024. Now many shippers are pushing expectations for higher demand and transportation costs to 2026.

Logistics provider RXO is confident the truckload market is heading upward, despite any disruptions caused by US tariffs. Spot rates in the fourth quarter were up 11.6 % on average year over year, according to the most recent RXO Curve forecast. That double-digit jump followed a 5.8 % increase in the third quarter.

RXO expects mid-single-digit percentage growth in pricing in 2025, although spot rates could break higher, Corey Klujsza, vice president of pricing and procurement at RXO, said in an interview in early March. Year over year, spot pricing was up about 12 % in February, he noted.

Truckload spot rates dropped in line with seasonal norms in February, but truckload capacity continues to tighten, with more small carriers leaving the market, he said. That should drive spot rates higher, eventually pulling up contract rates, according to RXO.

“ It’ s still a challenging environment without a doubt, but I believe we’ re pretty close to what I would call a supply-demand equilibrium,” Klujsza said.

He sees signs that freight demand will be spurred by several separate“ demand triggers,” rather than just one.

“ The consumer remains relatively resilient, and we think we’ re in the early innings of [ inventory ] restocking,” Klujsza said.“ That can be part of a demand trigger as we go into the second quarter.”

Others were more skeptical.“ You need some sort of a shock [ to spark demand ],” Klaskow said at TPM25.

Beyond inventory restocking and consumer spending, Klujsza pointed to rising industrial production and new orders as potential sources of demand growth. The Purchasing Managers’ Indexes( PMIs) published by the Institute for Supply Management( ISM) and S & P Global Market Intelligence both were positive in February, the second straight month of expansion.

The PMIs are important barometers; industrial production represents about 58 % of total US truck tonnage, according to the Commodity Flow Census from the US Census Bureau. Klaskow called the PMI a“ leading indicator” of LTL demand.

The S & P Global PMI rose to 52.7 % in February from 52.1 % in January, while the ISM PMI fell slightly from 50.9 % to 50.3 %. Any PMI reading higher than 50 represents expansion.

Manufacturing improvements, however welcome, may only be“ skin deep,” Chris Williamson, chief business economist at S & P Global Market Intelligence, said in a statement in early March.

“ Production and purchasing were often buoyed by companies and their customers building inventory to beat price hikes and supply issues caused by tariffs,” said Williamson, adding that higher factory input costs are being passed onto consumers.

Senior Editor Ari Ashe contributed to this report.