Freight Market Showed Hopeful Signs in Q2
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The freight market showed signs of recovery in the second quarter despite ongoing issues preventing it from truly turning a corner, according to experts.
The U.S. Bank Freight Payment Index found that national shipment volume increased 2.4% from the previous quarter and spending increased 1.2%, marking the first sequential gain in both metrics in three years. highlighted that all five regions in the country posted sequential volume gains, with the Southwest leading at 6.7%.
“The second quarter’s sequential growth in both shipments and spending are a welcome shift after years of contraction,” said Bobby Holland, director of freight business analytics at U.S. Bank. “However, with all of the tariff-related volatility potentially impacting trucking activity, it is too soon to say if the market has turned the corner.”
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The U.S. Bank report was less favorable when it came to year-over-year comparisons; it found that national shipments decreased 9.8%, and spending declined 4.9%. The report noted, however, that this was the smallest year-over-year decrease in shipments since Q3 2023.
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“With unevenness in key freight drivers like manufacturing, housing and port activity, the quarter-over-quarter gains are encouraging,” said Bob Costello, chief economist at . “There are signs the industry is beginning to rebalance, even if the road ahead remains bumpy.”
“There are signs the industry is beginning to rebalance, even if the road ahead remains bumpy," American Trucking Associations Chief Economist Bob Costello said. (Truckload Carriers Association)
Meanwhile, the showed a continued weakening of seasonally adjusted freight demand when the quarter ended. It found that activity declined 0.2% sequentially from May but increased 1% year over year. The report is co-authored by Michigan State University professor Jason Miller and University of Tennessee professor Yemisi Bolumole.
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Miller noted that the 1% annual gain was “primarily driven by more output in primary metals, a little bit more in some quarrying activity.” He added, “It was really driven by the specialized sector, but a 1% year-over-year increase isn’t that much.”
Miller said that while some sectors are doing better than others, these pockets of strength are relatively few and far between and still face tariff impacts. He isn’t all that encouraged by the next two quarters either, with there being no real signs of a sustained increase in demand; rather, he sees more downside risks.
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Jonathan Phares, assistant professor of supply chain management at Iowa State University, said Q2 variability in freight from month to month leveled out in a way that was abnormal, and he suspects that tariffs could have additional negative impacts on freight volume and pricing as they go into place long term.
“We might see an additional softening in purchasing power from consumers that could lead to additional declines in freight volumes,” Phares said. “That’s not guaranteed, but we do know that — especially the poorest households — are seeing grocery prices that are much higher.” Phares warned that this could lead to less discretionary income for consumers, further threatening freight volume.
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“Stuck is the word we’ve been using for several quarters now,” said Ken Adamo, chief of analytics at DAT Freight & Analytics. “We’ve seen no real movement up or down in the last several quarters, present quarter included. Especially on the contract side, it’s been remarkable how little movement we’ve seen in contract dry van rates over the last couple of years. On the spot side, you tend to see a little bit more choppiness.”
Adamo noted that seasonality trends started showing up toward the end of Q2, especially regarding rates. But he also suspects a large portion of the capacity pool is operating near breakeven, meaning tighter conditions could cause capacity crunches around seasonal events. And he noted that this is happening absent of any major shift in freight demand.
“This tariff stuff is just throwing an absolute curveball into everything,” Adamo said. “I think part of the problem is it’s just been in low to no growth for way too long, and it’s not flushed enough of the capacity out of the market that could lead to a more systemic recovery.”
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