The latest economic release from AFS Logistics and TD Cowen shows the effects of a freight market in stasis, mired in prolonged low demand as businesses wait to see how evolving trade policies unfold. Data shows a tenth straight quarter of depressed truckload pricing, LTL carriers carefully managing profitability from weak volumes and parcel carriers working to shift pricing power back in their favor.
“Despite plenty of international travel by world leaders, trade policy remains an unsettled picture and businesses are opting for a wait-and-see approach and delaying spending decisions,” says Andy Dyer, CEO, AFS. “With no catalyst to ignite demand, some carriers are buckling under the pressure of unrelenting low volumes while others are deploying all available mechanisms to capture revenue.”
Key takeaways:
· After peaking at 25.7% above the January 2018 baseline in Q1 2022, truckload rates began a sustained decline, bottoming out at just 4.3% above the baseline in Q2 of the following year. The index projects a 10th straight quarter with rates at or near the bottom, with Q3 2025 projected at 5.6% above the 2018 baseline, a slight quarter-over-quarter (QoQ) decline. Looking back at Q2 2025, distance and cost per shipment showed increased alignment, a potential indicator of stable market behaviors, though the continued uncertainty around trade policies clouds whether this represents a structural shift or a temporary phenomenon. Excess capacity continued to suppress truckload rates, though ongoing carrier exits and new regulatory guidance for stricter labor and language standards for truck drivers could ease some downward pressure.
· With soft demand an inescapable reality and shifting trade policies posing additional challenges, LTL carriers are pivoting to tightly managing revenue, keeping a close eye on lanes and prioritizing profitability. In Q2 2025, weight per shipment declined by 5.1% year-over-year (YoY) but cost per shipment only fell by 2.9%, indicating the success of carriers’ revenue strategies. The LTL rate per pound index projects Q3 to be the seventh straight quarter with a positive YoY trend, reaching a new high of 65.9% above the January 2018 baseline, driven in part by seasonal factors and carrier pricing actions.
· Pressure to meet Wall Street expectations in the face of headwinds like high labor costs and low demand is driving increasingly aggressive efforts by UPS and FedEx to wrestle back control of pricing from shippers.
“While there’s some evidence that the steady decline we’ve observed in weight per shipment is in part driven by mode shifting, it’s also indicative of a simpler reality — carriers moving lighter pallets because of soft LTL demand,” says Aaron LaGanke, VP, freight services, AFS. “The continued resilience of the rate per pound index shows the effect of carrier pricing discipline, and the upcoming NMFC transition to a density framework should equip carriers with another method to tightly manage freight classification and pricing.”
