?? Freight Market Update 3/6/25
Freight 360
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Here's?our weekly market update! ?? In today's edition:
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BROKER EDUCATION
New Freight Broker Mistakes & More Q&A | Final Mile 83
Ben & Stephen answer your freight brokering questions and discuss:
Produce Update
?? Trade War Escalates.
Trump’s 25% tariffs on Canadian and Mexican imports officially took effect this week, triggering swift retaliation. Canadian PM Justin Trudeau announced counter-tariffs on $100 billion worth of U.S. goods, rolling out in two waves—starting with $20 billion in clothing, appliances, and alcohol, with more to come. Mexico’s President Claudia Sheinbaum plans to unveil a response at a rally on March 9. Meanwhile, Trump also slapped an extra 10% tariff on Chinese imports, prompting China to hit back with new 15% and 10% levies on U.S. agricultural goods, including fruits and vegetables.
The International Fresh Produce Association (IFPA) is stepping in, hosting a virtual town hall on March 6 to address concerns over rising costs. The association is pushing for fresh produce exemptions and providing data on the tariffs’ impact to policymakers. With prices already climbing, these trade tensions could further squeeze both businesses and consumers, adding more fuel to the inflation fire.
Market Update
?? Freight Market Overview
The trucking market remains in a state of uncertainty as demand shows only modest gains. Michigan State University’s Truckload Ton-Mile Index (TTMI) indicated a slight rebound in December, bringing demand back to levels last seen in September and October. However, this 0.1% quarterly uptick isn’t enough to signal a true recovery, according to Michigan State’s Jason Miller. Meanwhile, the ATA For-Hire Truck Tonnage Index reported a 0.3% year-over-year gain in January—its first increase since August—following two months of declines. ATA’s Chief Economist Bob Costello warned that weak manufacturing and retail sales continue to suppress freight volumes. Adding to the uncertainty, trade tensions under the new administration could lead to reduced shipping activity, as businesses take a cautious approach in early 2025.
?? Dry Van Market
Dry van load postings rose 3% week-over-week and are trending 22% higher than this time last year, but excess capacity is keeping rates down. The dry van load-to-truck ratio (LTR) closed at 5.19 last week, reflecting continued softness in the market. After briefly stabilizing, spot rates dropped again, marking declines in seven of the past eight weeks. Despite an 11% rise in load volume last week and a 2% increase over the past month, the national 7-day rolling average for dry van rates fell to $1.66 per mile. This remains $0.07 higher than last year and $0.04 above 2019 levels. On DAT’s Top 50 lanes, carriers earned an average of $1.92 per mile—down $0.02 week-over-week but still $0.26 above the national average.
?? Reefer Market
Reefer freight remains heavily influenced by seasonal produce shifts, with Arizona’s “Winter Salad Bowl” fueling demand. Record-high lettuce volumes from Arizona and increased cross-border shipments from Mexico have tightened capacity, with the USDA reporting a truck shortage in the region. Last week, reefer carriers moving outbound Arizona loads earned an average of $2.19 per mile, a 6% year-over-year increase. However, overall reefer load postings dropped 15% last week, even as total loads moved rose 4%. The reefer LTR closed at 7.47, remaining 12% above last year’s levels. Despite the strong demand for produce freight, national reefer rates fell $0.05 per mile last week to $1.91, continuing a $0.31 slide since the start of the year. Even with this drop, rates remain $0.03 above last year and in line with long-term averages for Week 9.
??? Flatbed Market
Flatbed demand continues its steady climb, with load post volumes up 14% last week and tracking 41% above last year’s levels. While the market is still slightly below pre-pandemic averages, last week’s LTR surged to 39.40, signaling strong demand relative to truck availability. The market is seeing increased activity in the heavy machinery sector, with South Korean manufacturer Doosan—parent company of Bobcat and ?koda Power—growing its U.S. presence. Ports like Savannah and Tacoma are key entry points for imported equipment, though machinery imports overall were down 23% last year. On the rate side, flatbed spot prices saw their best weekly gain of the year, rising nearly $0.03 to $2.04 per mile. The national average sits $0.07 higher than last year, though still trailing 2018 by $0.10 per mile.
NEWS UPDATE
?? TQL Faces Major Lawsuit
Total Quality Logistics (TQL), the nation’s second-largest freight broker, is in hot water over broker transparency. Pink Cheetah Express, a small Florida-based carrier, has filed a federal lawsuit accusing TQL of ignoring a 2023 DOT order requiring compliance with federal transparency rules. The carrier alleges TQL has refused to release records for 15 loads hauled over the past three years, despite an FMCSA directive to do so. The suit challenges TQL’s use of contract language that waives carriers’ rights under 49 CFR 371.3, a regulation ensuring access to broker transaction records. The case has reignited debate over rate transparency, just as new tariffs on Canada and Mexico threaten to shake up the freight market.
At the heart of the dispute is a 2023 load of ice cream, where Pink Cheetah was paid $1,500 but later discovered TQL had taken a 44% cut—far above the industry’s standard broker margin. After FMCSA forced TQL to hand over those records, the carrier pushed for more data, only to be stonewalled again. Now, Pink Cheetah wants the court to compel TQL to comply, eliminate the waiver clause in its contracts, and enforce FMCSA’s order industrywide. With TQL’s $9 billion business at stake, the lawsuit could have major ripple effects across freight brokerage, as nearly every broker uses similar waivers. TQL has until March 18 to respond, and with appeals likely, this legal battle is far from over.
?? Trump Pushes Shipbuilding Plan
The Trump administration is rolling out tax breaks and new investments to revive U.S. shipbuilding and reduce reliance on China. In a speech to Congress, Trump announced plans for a White House shipbuilding office and policies aimed at boosting domestic production for both national defense and the commercial maritime sector. The initiative is tied to a new bill introduced in the House on Feb. 24, reinforcing Trump’s push to “make ships very fast, very soon.” Meanwhile, a U.S.-based consortium led by BlackRock and MSC Group struck a $22.8 billion deal to acquire Chinese-controlled port terminals in Panama, a move Trump framed as part of his goal to “reclaim the Panama Canal.”
The administration is also drafting an executive order to impose fees on Chinese ships docking at U.S. ports and prioritize berthing for U.S.-flagged vessels. Additional measures include tariffs on Chinese-made container cranes and higher wages for shipyard workers building nuclear-powered ships. While China recently became the world’s top shipbuilder, accounting for over half of the global fleet, Trump’s plan aims to reverse that trend. However, analysts warn that U.S. port fees could increase shipping costs by up to $800 per container and force smaller ports out of business if carriers reroute to avoid rising expenses.
?? Trucking Braces for Tariff Fallout
Trump’s newly implemented 25% tariffs on imports from Canada and Mexico are set to shake up the trucking industry, with experts warning of supply chain disruptions, rising costs, and increased border delays. Jenna Slagle of Project44 cautioned that the added expenses will likely trickle down to consumers, contributing to inflation. Shippers, anticipating the tariffs, rushed goods across the border in advance, with Canadian imports spiking 10% in the week leading up to implementation. The tariffs are part of a broader White House push for more favorable trade terms, including a separate 10% tariff on all Chinese imports and a 25% duty on steel and aluminum coming March 12.
With Canada and Mexico among the U.S.’s top trading partners—accounting for over $1.6 trillion in trade last year—the impact will be widespread. Supply chain experts predict freight volume shifts, higher operating costs, and delays at border crossings. Russell Zuppo of Uber Freight noted that while nearshoring to Mexico had been gaining momentum, some companies are now reassessing those investments. Analysts also warn that eliminating the $800 de minimis threshold for duty-free imports will force retailers to navigate full customs clearance for over a billion shipments annually. As the trucking industry scrambles to adapt, businesses are urged to develop contingency plans, explore alternative sourcing, and invest in digital supply chain visibility to stay ahead of the uncertainty.
?? TSMC Expands U.S. Investment
Taiwan Semiconductor Manufacturing Co. (TSMC) has announced a $100 billion investment in U.S. manufacturing, further solidifying its presence in the American semiconductor sector. Speaking at the White House alongside TSMC CEO C.C. Wei, President Trump revealed plans for two additional chip fabrication facilities in Arizona, where the company is already constructing three plants. This expansion brings TSMC’s total U.S. capital commitment to $165 billion, with expectations of generating thousands of jobs and bolstering domestic semiconductor production. The company, a key supplier to industry leaders such as Nvidia, recently initiated high-volume production at its first Arizona fab, following a $6 billion grant under the CHIPS and Science Act.
This substantial investment aligns with broader U.S. policy objectives aimed at reducing reliance on foreign semiconductor supply chains. While Trump has been critical of the CHIPS Act, he has emphasized the strategic importance of bolstering domestic chip production, particularly in light of ongoing global competition. The announcement follows Apple’s recent commitment to invest over $500 billion in U.S. manufacturing, reflecting a broader industry trend toward reshoring critical technology supply chains. Meanwhile, the administration’s newly imposed tariff framework, which could extend to 25% levies on semiconductors by April 2, adds another layer of complexity to the evolving semiconductor landscape. TSMC’s expanded footprint in the U.S. may also mark a shift in global chip manufacturing dynamics, particularly as it considers relocating production of advanced artificial intelligence chips outside of Taiwan.
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