The freight market is in flux this spring. Between tariff policy swings, softening volumes, and an increasingly complex recovery timeline, shippers and carriers alike are navigating one of the more uncertain stretches in recent years. Here’s what’s driving the change and where the road may lead next.
Tariff Uncertainty Is Reshaping the Landscape
Tariffs are back in the spotlight, creating ripple effects across the logistics sector. The U.S. government recently expanded tariffs on steel, aluminum, and a range of manufactured goods, including inputs critical to freight and construction industries. According to Reuters, these moves have raised costs across multiple sectors, prompting manufacturers and importers to pull forward shipments ahead of implementation.
That surge in volume created a temporary lift, particularly in the flatbed segment. But now that. early demand has tapered, many in the industry are bracing for a slower second half of the year.
Freight Volumes Soften Amid Economic Headwinds
The Cass Freight Index shows shipment volumes continuing a year-over-year slide, down over 5% from last spring. Slower consumer spending and cautious inventory strategies have contributed to reduced demand for surface transportation, especially in retail and durable goods.
Forecasts for 2025 now suggest freight volumes will remain mostly flat. The American Trucking Associations (ATA) recently revised its outlook, projecting modest growth of just 1.6% year-over-year, a slight rebound from prior declines, but still below historical norms.
Truckload Rates Under Pressure
Freight rates remain under pressure. Spot rates saw a modest uptick in Q1 due to the pre-tariff activity but have since declined, particularly in flatbed and dry van lanes. Contract rates are also underperforming earlier expectations.
Analysts at ACT Research now project truckload rates for 2025 will rise just 1.6% year-over- year, down from a previous forecast of 2.5%. With capacity still ample in many lanes and volumes underwhelming, the near-term rate environment is expected to remain subdued.
Capacity and Utilization in a Holding Pattern
Truck utilization, a key measure of market tightness, is likely to trend lower throughout 2025. ACT Research predicts active truck utilization could fall meaningfully by Q4 before starting a recovery in mid-2026. The deeper the near-term drop in demand, the more pronounced the eventual rebound could be, especially if capacity exits accelerate.
Adding to the challenge: rising equipment costs. Tariffs on steel and aluminum are inflating the price of new trucks and trailers. Bloomberg estimates these increases could push truck. acquisition costs up by tens of thousands of dollars, especially for smaller carriers operating on thinner margins.
Market Outlook: A Bumpy Road with Multiple Scenarios
The trucking market remains highly sensitive to policy shifts and economic signals. The Trucking Conditions Index (TCI), tracked by FTR, turned slightly positive in March, aided by declining diesel prices and tariff-driven volume, but the outlook is mixed. Most models now suggest a softer market through late 2025, followed by a gradual recovery into 2026.
However, that recovery timeline could shift. If current conditions lead to more aggressive downsizing or tighter equipment availability, a sharper rebound could emerge, potentially pushing truck utilization and rates above prior forecasts by 2026.
What Shippers Should Watch Now
- Tariff negotiations:
Any changes in scope or timing could trigger additional pull-forward activity or prolong the downturn. - Capacity contraction:
Monitor fleet downsizing or carrier exits, especially among small and mid-sized players. - Spot vs. contract behavior:
Short-term rate moves may diverge from long-term contracts, creating strategic opportunities.
The freight market is walking a tightrope in 2025. Uncertainty is the theme, but preparation is the advantage. As volumes plateau and tariffs shake up supply chains, the most resilient players will be those who stay informed and ready to pivot. Keep an eye on market indicators and policy updates to stay ahead of what’s next.