Recent weather events cause lingering impacts
U.S. spot market forecast
The C.H. Robinson 2024 dry van linehaul cost per mile forecast remains unchanged at -5% year over year (y/y), while the 2025 forecast also remains unchanged at +9% y/y.
Hurricanes Helene and Milton resulted in increased spot pricing in and out of the Southeast. These increases have mostly tapered down, although some inbound and local pressures persist due to infrastructural damage and recovery.
On the West Coast, increased port volumes have been stronger than expected due in part to retail season and a shift from East and Gulf Coast ports. Many shippers plan to utilize West Coast ports further until a resolution to the labor dispute is reached, as a potential strike in January still looms.
Despite these issues, the freight market has been able to withstand them with only minor disruption due to the excess capacity that remains present. Typical seasonality is expected as we close out the year and continue into the next.
The 2024 refrigerated annual linehaul cost per mile forecast remains unchanged from an annual y/y comparison at -4%, while the 2025 forecast is projected to grow +7% y/y.
Contract truckload environment
2025 Planning
As shippers prepare for their annual request for proposal (RFP) season, they’re seeking strategies to enhance flexibility, resilience, and efficiency in their logistics operations. One strategy that’s often overlooked is drop trailer shipping, which can offer rate stability and identify savings opportunities.
While typically viewed as a method involving asset-based carriers, C.H. Robinson is heavily integrated with drop trailer shipments, accounting for approximately 10% of our daily truckload volume. As North America's fourth largest drop trailer provider, C.H. Robinson offers a compelling case for including drop trailer shipping in your RFP considerations this year.
In a drop trailer arrangement, carriers leave a trailer at a shipper’s facility for loading or unloading at the shipper’s convenience, rather than requiring a driver to wait on-site. This setup can provide unique advantages for both shippers and carriers, although it demands solid carrier partnerships, robust trailer capacity, and careful scheduling. When properly executed, drop trailer arrangements reduce facility congestion, speeding up turnaround times and cutting detention costs.
This has often led to shippers seeing this as an arrangement only for asset-based carriers and not brokers, but this assumption isn’t necessarily accurate and could be costly as not all brokers are created equal.
Although traditionally considered a freight broker, C.H. Robinson’s expertise and expansive network serve as invaluable players in drop trailer solutions in ways typically only expected from asset providers. As a top five provider of drop trailers in North America, C.H. Robinson brings scale and flexibility that rivals dedicated carriers, executing over 500,000 drop trailer shipments annually with over 10,000 trailers in circulation.
By leveraging their broad market reach, technology, and operational resources, C.H. Robinson provides the trailer capacity and reliability needed for a successful drop trailer program.
Ask your C.H. Robinson account team for more information about C.H. Robinson’s Drop Trailer Plus.
Contractual performance
The contractual landscape remains 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 TMC, a division of C.H. Robinson, which offers a large portfolio of customers across diverse industries.
As displayed in the following chart, the RGD has remained flat for approximately two years. Route guide depth (RGD) is an indicator of how the backup transportation provider strategy works if the awarded provider rejects the tender. As displayed in the following chart, the RGD has remained flat for approximately two years.
For long hauls of more than 600 miles, the RGD in September 2024 was 1.18 (1 would be perfect performance and 2 would be very poor), which is 1.9% better than the month of August at 1.20 and 1.3% better than September 2023. As expected, RGD performance has continued to improve since the slight increase leading up to July. As visually depicted in the charts, RGD is at very strong levels historically.
The trend for shorter hauls of less than 400 miles is similar. RGD for September 2024 for these shorter hauls was 1.11, which is approximately even with the previous month but 1.1% worse than September 2023.
This decreased tension within the RGD highlights the seasonal components over the summer months. With so much of the industry waiting to know when the cycle will shift, typically a sustained increase in RGD over several months represents a change in the market. As the chart above shows, RGD has not increased in recent months beyond typical seasonal pressure.
Geographically, the Northeast is the only region that shifted upward in September as season pressures increased, worsening just a mere 1% since the month prior. This marks the worst performing region out of the bunch at 1.20 for September. While the other regions have all slightly improved in RGD performance in September, the change in performance is subtle.
Voice of the carrier from C.H. Robinson
Market insights
- The current sentiment is that the freight market is not improving; however, it’s not getting any worse. Skepticism exists that this stabilization could remain short-term due to recent disruptions like the hurricanes.
- Carriers continue to seek new ways to generate revenue outside of transportation, such as warehousing and/or offering cross-docking services at their facilities.
- Carriers are leaning into their relationships with brokers more than ever, seeking out strategic engagements when possible.
Equipment
- Carriers have stated that various truck manufacturers have warned them price increases (both purchase cost and maintenance) are on the horizon (2025-2026), due to EPA emissions regulations along with CARB compliance.
- Tractor availability is stable and abundant.
- The used trailer market is becoming increasingly more available, which is driving the cost of that equipment downward due to the oversupply.
Drivers
- The driver labor pool is plentiful, which is allowing carriers to be selective during the hiring process.
- Despite the broad driver availability, carriers still report continued struggles with finding high-quality drivers.
- Time at home remains a top priority. There is a glaring gap between the requirement of the job and the expectation of the candidates looking to be drivers.
Refrigerated truckload
Western United States
October experienced normal seasonality, with the expectation being similar through November.
The Pacific Northwest region picked up in early October as apples started to ship out more. As the month progressed, Arizona started their season out of Nogales and Yuma as well. Both Arizona and the Pacific Northwest saw early capacity constraints while there was a higher L/T ratio, but over the past couple weeks that has stabilized with more capacity entering those regions.
Entering into November, freight out of the Salinas area will begin to slow down as production out of Yuma increases for harvesting mixed vegetables, which will last through the first quarter of 2025. November will end with Thanksgiving during the last week of November. While normal seasonality is expected, keep in mind that this can mean difficulties with coverage and higher rates, especially for short-notice and recovery loads.
Central United States
The oversupply of carriers continues with the ability to cover loads being relatively available despite seeing some fluctuations in price points that had been previously stable. Expect this to continue at least through the first couple weeks of November. Freight out of Arkansas specifically has seen pockets of tightness with low lead time.
Simple freight is moving quickly, while more complex shipments are taking more time. Produce season out of Indiana is coming to an end, but expect things to stay relatively flat through November.
Eastern United States
Tightness prevailed in October primarily due to two major hurricanes in the Southeast, which caused capacity constraints resulting in a backlog of freight. The market has since corrected itself and settled back into regular seasonal cadence. As we move into November, we will begin to see a small produce push out of the Southeast as a fall crop is ready to haul.
Flatbed truckload
November brings two key factors that will impact flatbed trucking: those are the U.S. election and cold weather. Below is a list of some of the primary influences.
Infrastructure investment
- Changes in infrastructure funding led to an allocation shift on capital expenditure spending, depending on policy.
- Tariffs and import restrictions impact raw materials markets, which can shift freight patterns to larger domestic producers of metals and renewable energy equipment.
Energy policy
- Energy companies are diversifying their product portfolio, potentially impacting the heaviest lanes and commodities shipped.
- Potential outcomes include oil and gas market volatility or a shift toward solar and renewable energies, each influencing flatbed markets.
Interest rates and building products sector
- Effective inflation management and a decline in interest rates could boost demand for building products, benefiting the flatbed market.
Weather impacts
- Seasonal and extreme weather events, especially in winter, pose challenges like delays in loading, reduced route availability, and heightened safety concerns.
- Winter weather effects on the flatbed sector could also drive fluctuations in demand as certain projects slow down or pause.