Freight Market Update

WEEKLY?UPDATE

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Unlocking the Logistics Puzzle: Understanding Drayage

We answer a listener question about drayage in this snippet of Episode 120 of the Freight 360 Podcast.

PRODUCE?UPDATE

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?? Produce Prices Drop, But Trouble Looms.?The ProduceIQ Index kicked off the year with a sharp 9% drop, falling to $1.27 per pound as post-holiday demand cooled. Despite the decline, prices remain the second-highest for Week #1 in a decade. A polar vortex sweeping through the Southeastern U.S. is threatening transportation and production, with record snowfall and ice complicating Midwest logistics. Growers in Central Florida face freezing temperatures that could slow yields, while South Florida remains unaffected. Meanwhile, a potential January 15 port strike looms, raising concerns about supply disruptions for melons, grapes, and pineapples.

Avocados dropped 15% this week but remain at decade highs, starting the year at $60 per 48ct case. Table grapes hit $38—a ten-year high—due to low Peruvian supply, and celery prices climbed 8% as Yuma, AZ struggles to ramp up production. Relief for grapes and celery may arrive mid-January, but the looming strike could derail expectations. The produce market enters 2025 on shaky ground, with labor shortages, weather challenges, and trade disruptions dominating the forecast.

MARKET UPDATE

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?? Market Overview

This week, we spotlight Yuma, AZ, the "Winter Lettuce Capital," supplying 90% of the U.S.'s winter leafy greens.?The Phoenix freight market is experiencing moderate tightening in outbound truckload capacity this week, driven by its growing role as a distribution hub fueled by surging commercial warehouse development. While inbound truckload volumes have dropped 26% over the last month, they remain 17% higher year-over-year, with inbound spot rates up 13%. This market continues to see high import activity as shippers front-load goods to preempt potential tariff impacts. These dynamics make Phoenix a critical focal point for freight operations in early 2025.

?? Dry Van Market Trends

Dry van spot rates in Phoenix reflect the market's growing demand, with inbound lanes like Los Angeles to Phoenix seeing a 16% year-over-year increase, averaging $3.22 per mile. Nationally, the average dry van linehaul rate closed last week at $1.80 per mile, slightly down from the prior week but still 2% higher year-over-year. On DAT’s Top 50 lanes, rates averaged $2.20 per mile, significantly above the national average. The dry van load-to-truck ratio (LTR) kicked off 2025 at 9.02, aligning with historical Week 1 activity despite the shortened shipping week due to the New Year holiday.

?? Reefer Market Insights

Reefer rates have seen seasonal tightening, with the national average increasing to $2.22 per mile, up $0.21 over the past month. In the Yuma market, a critical hub for winter produce, rates are peaking, with lanes like Yuma to Los Angeles averaging $3.57 per mile, nearly $0.50 higher than last year. The reefer load-to-truck ratio started 2025 at 16.58, highlighting robust demand. However, rates may soften as capacity adjusts, barring further weather disruptions like Winter Storm Blair, which could drive up reefer rates for protect-from-freeze shipments.

??? Flatbed Market Overview

Flatbed capacity in the Shreveport market remains tight, with truckload volumes 60% higher than last year and spot rates averaging $2.69 per mile, up nearly 5% year-over-year. Nationally, flatbed linehaul rates began the year at $1.98 per mile, slightly lower than the prior year’s Week 1 average. The flatbed load-to-truck ratio stands at 23.96, reflecting strong demand across industrial and manufacturing hubs like Shreveport. While rates are steady, market conditions suggest ongoing opportunities for flatbed carriers, particularly in construction and advanced manufacturing sectors.

NEWS UPDATE

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?? Ports Saved: ILA, USMX Strike a Deal.?

In a last-minute win, the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) reached a tentative six-year contract agreement, narrowly avoiding a potential strike. The deal, announced just six days before the previous contract’s extension was set to expire, allows ports from Texas to Boston to keep running smoothly. The agreement grants terminal operators broader rights to introduce semi-automated technology, while the union secured guarantees for new high-paying jobs tied to this equipment. Final ratification, however, is still pending as both parties iron out remaining details, including benefits and container royalties.

This deal is a major victory for ILA President Harold Daggett, who staunchly opposed full automation, framing it as a threat to American dockworker jobs. Support from President-elect Donald Trump, who previously backed the union’s anti-automation stance, played a pivotal role in sealing the agreement. Retail and trade groups applauded the resolution, citing its importance for ensuring supply chain stability and enabling port modernization. While the finer points of the agreement remain confidential, its impact is set to shape the future of labor and efficiency at East and Gulf Coast ports.

?? Wildfires Wreak Havoc Across LA, Disrupt Freight.?

Wildfires fueled by extreme winds and dry conditions are causing chaos across the Los Angeles metro area. The Palisades and Eaton Fires have destroyed thousands of structures, claimed at least five lives, and shut down major interstates as flames spread inland. Gusts over 50 mph are overturning trailers, making freight movement dangerous, while visibility issues and wind hazards are causing slight delays at LAX. The California Department of Transportation is urging drivers to avoid affected areas as fire activity and winds persist.

The National Weather Service warns that conditions remain ripe for fire spread, even as the strongest winds are expected to subside by midweek. Gusts of up to 35 mph will continue through the weekend, posing ongoing risks to travel and freight operations. As the fires rage on, supply chain disruptions and safety concerns mount across Southern California, highlighting the urgent need for caution in affected zones.

?? AIT Expands with Krupp Trucking Buyout.?

AIT Worldwide Logistics has acquired St. Louis-based freight forwarder Krupp Trucking, strengthening its portfolio with high-tech logistics capabilities. The deal includes a 115,000-square-foot office and warehouse in Earth City, Mo., a fleet of over 60 trucks, and nearly 100 employees. Krupp, known for transporting high-value goods and shipping 2.5 million kilograms annually across U.S. and international lanes, brings its expertise in technology logistics to AIT’s global network. The acquisition builds on AIT’s goal to provide white-glove services, particularly in the high-tech industry.

The partnership reflects “a powerful synergy,” according to AIT Chief Development Officer Ray Fennelly, combining AIT’s global reach with Krupp’s stellar service. Founder Scott Krupp will remain onboard as city director, emphasizing the benefits of enhanced structure and broader opportunities for his team. Ranked No. 35 on the Transport Topics Top 100 list, AIT’s acquisition of Krupp solidifies its foothold in high-value freight forwarding while bolstering its position as a leader in logistics solutions.

?? Trump Targets Panama Canal Amid Trade Tensions.?

President-elect Donald Trump sparked international controversy by suggesting the U.S. should "take back" control of the Panama Canal, citing concerns over rising fees and China’s influence. Speaking at Turning Point USA’s AmericaFest, Trump criticized Panama’s new tariffs and reservation system, which include penalties of up to 250% for late arrivals. The Canal, crucial for U.S. commerce and Navy deployment, has faced disruptions due to droughts and traffic fluctuations. Panama’s President José Raul Mulino quickly rebutted Trump’s remarks, emphasizing the Canal’s sovereignty and the necessity of its fee structure for maintenance and modernization.

The Panama Canal has long been a linchpin of global trade, saving ships nearly 8,000 miles on routes between the Pacific and Atlantic. Built by the U.S. and handed over to Panama in 1999, it now supports 40% of U.S. cargo traffic. Mulino defended its independence, calling Trump’s claims invalid and affirming Panama’s right to control its operations. Mexico’s President Claudia Sheinbaum also expressed solidarity with Panama, further highlighting tensions as Trump ramps up trade pressures across the Western Hemisphere.

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