Carriers forced to do more with less in lieu of market upswing

At last week’s annual FTR Transportation Intelligence conference in Indianapolis, industry leaders and market experts offered sometimes painful commentary on the current and future state of the freight industry. One topic was the impact of continued softness in the spot market. Despite 2024’s poor performance, 2025 is expected to bring growth. Avery Vise, vice president of trucking at FTR, expects truckload spot rates to increase 6.5% to 7% in 2025 compared to 1% overall in 2024. Contract rates are predicted to rise 3% after falling 3.5% in 2024.

Vise expects truckload volumes to rise next year in the dry van and reefer segment, compared to 0.2% overall in 2024. For next year, Vise expects dry van loadings to increase 1.5% while reefer loadings are estimated to rise to 2.6% in 2025.

One standout issue at the event was whether we’re in a recession of freight or rates. Eric Starks, chairman at FTR Transportation Intelligence, believes the latter. James Menzies wrote at TruckNews.com that Starks preferred to call it a rate recession, as trucking rates are being impacted not due to falling freight demand, but from excess truckload capacity that continues to exit the market at a slow rate. Additionally, analysts believe it will require both more freight volumes and less truckload capacity, with the current rate of capacity decline not sufficient enough to move the needle.?

In the meantime, absent a sustained market upswing, fleet strategies involve doing more with less and optimizing existing operations. For shippers, stability in the truckload space allows them to focus on the less-than-truckload segment, which is still in flux after the demise of LTL carrier Yellow. Yellow’s approximately 150 former terminals, 12,700 tractors and 42,000 trailers found new owners following a court-ordered auction. The Home Depot was noted at the conference to have paused bidding on its next annual contract as it waits for the dust from Yellow’s demise to settle. Part of that stems from Yellow formerly being the No. 2-ranked carrier for Home Depot.?