2025 Truckload forecast: Expect spot rates to rise
The potential for another East and Gulf Coast port strike combined with proposed tariffs has led some shippers to pull forward inbound shipments early to increase inventory and mitigate the impact of a strike or higher costs on supply chains. Since an agreement was reached days before a strike was set to occur, expect regional volume shifts as shippers look to transition imports back to U.S. East and Gulf Coast ports.
Due to these shifts, there may be some regional changes in spot pricing. These pricing changes are mostly near-term disruptions caused by shifting demand rather than net new demand. The current state of the truckload market remains oversupplied with carriers. Expect more information as details regarding tariffs unfold.
U.S. spot market forecast
The dry van linehaul cost per mile in 2024 finalized at 4% below 2023 levels. One year ago, the January 2024 forecast expected a 3% increase in 2024 dry van linehaul year over year (y/y) compared to 2023. In March the C.H. Robinson forecast adjusted to reflect a continuing softer market, with the expectation of a 2% increase y/y. In April the forecast cut to -2% y/y, with a final cut in June to -5% y/y. The forecast of an annual -5% y/y change remained for the second half of the year and the actual percentage finalized at -4%.
Looking ahead, the C.H. Robinson 2025 dry van cost per mile forecast remains at +9% y/y compared to 2024.
The refrigerated linehaul cost per mile in 2024 finalized at 4% below 2023 levels. The C.H. Robinson 2025 refrigerated van cost per mile forecast remains at +7% y/y.
Near-term risks of disruption to the freight industry such as winter weather storms and labor issues have been accounted for within the forecast, although the precise timing and impact of these events are yet to be determined.
Contract truckload environment
The contractual landscape remained relatively unchanged in 2024. Because the contract environment tends to follow the spot environment, monitoring the spot market over the next few months will be important. Keep the duration of contracts in mind, as longer-term commitments may see different pricing than shorter-term commitments due to the 2025 rate outlook.
The following insights are derived from C.H. Robinson Managed Solutions™, which serves a large portfolio of customers across diverse industries.
Route guide depth (RGD) is an indicator of how far a shipper needs to go into their backup strategies when awarded transportation providers reject a tender. As displayed in the following chart, the RGD has remained flat at a historically low level for approximately two years.
For long hauls of more than 600 miles, the RGD in December 2024 was 1.27 (1 would be perfect performance and 2 would be extremely poor), which is worse compared to the month of November 2024, at 1.22 and also worse compared to December 2023 at 1.20. RGD performance slightly worsened in December 2024 primarily due to seasonal factors. In the near-term, winter weather may also cause some temporary hinderance to performance.
The trend for shorter hauls of less than 400 miles is similar. RGD for December 2024 for these shorter hauls was 1.16, which is slightly worse than the previous month of 1.13 and worse than December 2023 at 1.11.
Geographically, the Northeast experienced the smallest change of all regions, worsening by 2.7% since the month prior, while the West and Midwest experienced the largest change at 3.7%. The RGD still remains at low levels between 1.14 and 1.20 for all regions.
Voice of the carrier from C.H. Robinson
2024 in review
This month, carrier commentary from each quarter of 2024 is summarized below.
Q1 2024
Carriers were quite optimistic in the first quarter of 2024. Due to positive trends in the market or their business in December 2023/early January 2024, many believed the market would turn, and the only uncertainty was when it would happen.
- Operating ratio (O/R), a key success metric for motor carriers, was specifically called out as being historically low and well-off intended targets in late 2023.
- Inefficiencies in the market increased and awarded volumes didn’t materialize.
- Some carriers took unprofitable business just to have freight to move, in hopes the market would shift.
- Many carriers noted business and O/R had slowly improved in profitability at the start the year.
Q2 2024
During the second quarter, carriers moved into survival mode. Muted demand coupled with over-supplied capacity showed no signs of changing.
- Economic uncertainty was a primary fear from carriers as well as a big reason many sought ways to control costs.
- Carriers believed any turnaround would now likely be in 2025.
- Van business was especially tight on margins and in some cases not profitable. Carriers diversified into other modes (i.e., flatbed, temperature controlled, drayage, cross-border, etc.).
- Carriers simply wanted to breakeven and ride the market out until more capacity exited the market.
Q3 2024
The third quarter brought continued frustration, inflationary pressures, and costs at all-time highs. Carriers got creative to generate revenue as most already implemented cost savings measures.
- Carriers commonly looked for further cost control opportunities as well as new ways to make money outside of hauling freight.
- Parking, warehousing, equipment maintenance, trailer storage, buying tires and oil in bulk, investments in technology and fleet management software, exploring new markets, selling into new industries, modal diversity, and acquisitions were all ways carriers tried to reinvent themselves to help minimize costs while scraping out profits.
- Claims costs went up significantly, both in number and dollar, some saying claims costs quadrupled in 2024.
- Insurance costs also went up significantly, with additional safety measures being used to mitigate premium increases but also litigation.
Q4 2024
Growing anticipation about the pace of capacity leaving the market. Many believed the trend would bring supply and demand into a more balanced state and relieve struggling carriers.
- The spot rate market improved and carriers believed it would lead to improvement in the contractual market.
- Carriers said that overall December felt tighter, but it was likely due to seasonality.
- The focus remained on cutting expenses, core lanes, staying disciplined, and leaning into other divisions/services to help work toward or maintain profitability.
- Profitability remained a challenge as carriers saw further increases in insurance, claims, parts, and labor.
- Carriers increased rates out of necessity or closed their doors.
Refrigerated truckload
East Coast United States
There were pockets of irregular and inconsistent volumes through December. This is somewhat expected during times of holiday volatility but has been more pronounced in the east. Generally speaking, volume is up, and carrier supply is down, but rates are moderate.
Central United States
This region has been the most stable during the 2024 holiday season. The standard seasonal shifts occurred, with volume being a bit volatile at times, but overall is flat. Capacity decreased in the waning weeks as carriers took time off for the holidays. Rates increased and decreased depending on the micro region and the day in question.
West Coast United States
Since Thanksgiving, there has been a large amount of relief in freight volumes moving from the western states. This decrease in volumes has caused spot rates to broadly decrease since at the close of the year, despite there being some tightness in available capacity during the last weeks of the year.
Flatbed truckload
During the cold weather months, flatbed shipping efficiency is increasingly important. Severe weather frequently causes delays in loading, securing freight, and highway travel. Additionally, ice, snow, and high winds can hinder access to job sites and yards, further impacting loading and unloading operations.
Inefficiency in flatbed loading creates challenges for safety, costs, and sustainability efforts as well. Challenges with safe yard loading or delays due to cold weather increase dwell times, which lead to additional emissions as trucks wait to be loaded and tractor running times increase.
This not only impacts environmental quality but also contributes to higher fuel consumption, driving up costs for carriers and shippers alike. Addressing these inefficiencies requires collaboration between shippers, carriers, and facility operators to implement solutions that minimize delays and prioritize sustainability.
To combat this, shippers should re-evaluate facilities for driver and load securement resources. Indoor or covered facilities for tarping and load securement provide safer conditions to reduce workplace incidents and help cement a reputation as a shipper or receiver of choice.
Driver lounges or heated waiting areas in conjunction with idling rules while on site can also reduce emissions during dwell time. As inclement weather moves across the country, taking additional steps to prioritize safety and sustainability is key to a successful supply chain in the open deck market.