Another quarter is in the books, and though there has been a considerable amount of economic turmoil, the U.S. truckload market has remained relatively calm (at least, when looking at shippers’ core freight KPIs).
We’re seeing a continuation of the same trends that have been on repeat since 2023: a slow growth demand picture, waning carrier capacity, and stable rates (though increasing on a year-over-year basis).
So what does all this mean for shippers and carriers?
Is the market heating up or cooling down?
When will this truckload cycle peak?
And how are tariffs and trade policy impacting the market?
We’ll tell you everything you need to know in the latest truckload market guide.
Q2 Truckload Market:
The Complete Guide for Logistics Pros
What you’ll learn in this comprehensive update:
- Q1 2025 truckload market recap
- Macroeconomic outlook
- 6 trucking trends to watch right now
- Q2 2025 truckload market forecast
New to the Curve?
These essential truckload market resources will give you foundational industry knowledge and teach you how how we build our proprietary spot rate index.
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RXO & the Curve
RXO acquired Coyote Logistics in September 2024. As a new, combined company, we will not only continue publishing industry-leading insights (like the Curve) — we plan on making them even better. Now, as the now third largest full-truckload freight broker in North America, we’ll have an even broader, richer dataset to analyze. We look forward to bringing you more freight market content throughout 2025 and beyond.
Spot & Contract Trucking Rate Recap: Q1 2025
In Q1, the Curve spot rate index remained in year-over-year inflationary territory; however, it was slightly lower compared to Q4 (more on that below).
In Q4, market conditions tightened to their highest levels in over two years. Early in Q1, driven by post-peak shipping and weather conditions, the market remained tight, then proceeded to unwind in February and March.
- Q1 truckload spot rates remained inflationary, but less so compared to Q4
Truckload spot rates increased 9.1% year-over-year at the end of Q1, down slightly from 11.6% in Q4. - Q1 truckload contract rates flipped inflationary for the first time since Q4 2022
Truckload contract rates* increased 1.4% year-over-year, up from -1.5% in Q4 2024. Contract rates usually lag spot rates by two to three quarters. We can see that recent spot market inflation has now brought up contract rates out of the trough and into an inflationary environment.
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Actual Spot Truckload Rates vs. Year-Over-Year
To build further confidence in the Curve (a year-over-year spot rate index), let’s see it up against our proprietary all-in cost-per-mile index — this is comparing annual change (without fuel) versus the actual rate (all-in cost, with fuel included).
As a reminder, these numbers are informed by real transactional data from thousands of daily shipments over the last 18 years.
After remaining essentially flat for the better part of two years, we finally saw our all-in index start to climb in Q4. Once again, Q1 saw another rise (though slight), and the all-in index crept up from 118 to 119.5.
Looking closer at rate performance by month, however, we saw January hold on to post-holiday shipping gains, then February and March normalizing back towards early December levels.
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The Q1 Curve was lower than in Q4 — are we heading back towards deflation?
In previous truckload market cycles, when shipping events hit during the upswing into inflation, they tend to accelerate market activity (i.e., pouring lighter fluid on the bonfire).
In this market cycle, similar to the end of the previous cycle, major shipping events are not having the same impact. Once again, a holiday came, increased spot market activity for a short period of time, then the market retreated back, settling only slightly higher than the pre-holiday baseline.
That said, though conditions have been relatively stagnant, no, this market cycle has not already peaked.
Let’s look at three reasons why:
1. A kink in the line is normal during a cycle.
This is far from atypical — look at previous cycles and you’ll find seven other examples of when the Curve has trended down during an upswing or trended up during a downswing.
The key is taking a long view of cycle activity to determine the overarching trend.
2. Consider seasonality.
This is the same pattern we see almost every holiday season, and rates moved in-line with our expectations.
Though the spot market has receded since January, it did the same thing in 2024, then continued to build momentum (albeit gradually) throughout the rest of the year.
3. It’d be difficult for rates to move materially lower.
Looking at the all-in index, in absolute terms, carriers are getting similar spot rates to those they were getting during the market peak in 2014, though their operating costs (diesel, insurance, labor, etc.) since then.
For context, the average marginal cost to operate a truck in 2024 was around 34% higher than in 2014, according to the American Transportation Research Institute. Simply put, it is difficult for freight rates to drop materially, as many carriers have been running with unsustainable unit economics.
The question moving forward: when the major Q2 shipping events come and go (produce season, International Roadcheck (AKA DOT Week), Memorial Day), will carrier supply and shipper demand have balanced to the point where we’ll see a sustained push upwards?
Early indicators in Q2 show that, though the baseline is higher, a steep ramp upwards is unlikely.
Q1 2025 Truckload Market: Key Takeaways
- The Curve (measuring year-over-year in linehaul spot rates, excluding fuel) remained in inflation (though slightly less than Q4), and all-in rates (actual amount paid to carriers) rose slightly.
- Though we are in an inflationary rate environment, and there was rate and capacity volatility early in the quarter, Q1 was still primarily a shippers’ market.
- Carriers remained under significant cost pressure, while shippers enjoyed relatively high tender acceptance rates, easy capacity and slight rate decreases in their RFPs.
State of the Industry: Macroeconomic Overview
There has been a considerable amount of volatility in the macroeconomic environment, and in Q1, the U.S. real gross domestic product (GDP) experienced its first decline (-0.3%) since Q1 2022.
While the U.S. economy is still forecasted to grow again for the full year 2025, it has to contend with several major uncertainties, most notably, the impacts from tariffs and trade policy.
Inflation & Interest Rates
Inflation has eased considerably over the past two years. In fact, April’s CPI reading was the lowest since 2021.
In April, the core Consumer Price Index (CPI), which excludes volatile food and energy costs, finished at 2.8% year-over-year, remaining essentially flat (+0.2%) from March.
However, core inflation remains higher than the Federal Reserve’s 2% target rate.
Tariff and Trade Policy Impact
With the looming prospect of ongoing, widespread tariffs, there is a concern that this index could trend back up in the coming months.
Many shippers still have non-tariffed goods throughout their supply chains, and others may have absorbed the cost of tariffs insofar, anticipating a change in trade policy.
If higher tariffs persist, shippers will either partly absorb the elevated costs, impacting corporate profit margins, or pass them through to consumers.
And consumers are already expecting it — as inflation expectations surged, consumer sentiment fell to its second lowest level in recorded history, according to the University of Michigan Consumer Sentiment Index.
While trade policy is highly fluid and recent actions have de-escalated global tensions, persistent higher tariffs have the potential to accelerate inflation in the near-term.
What is the Federal Reserve doing?
After multiple rate cuts in 2024, they are sitting tight for now.
The Fed has a dual mandate of promoting both price stability and maximum employment.
Until inflation begins to ease, or there is a major change in the health of the labor market, additional interest rate cuts are unlikely until later in the .
Currently, financial markets are pricing in two interest rate cuts totaling 50 bps by the end of the year.
Industrial Demand
Early in the year, the industrial sector of the U.S. economy was beginning to show signs of improvement.
After 26 straight months of contraction, the Manufacturing Purchasing Manager’s Index (PMI) entered into expansionary territory in January and February.
However, in March and April the index sank back into contraction.
The New Orders component of the Manufacturing PMI — one of the strongest leading indicators for U.S. economic activity — had been improving for five consecutive months, then dropped for two months. While it has since rebounded slightly, it is still in contraction.
Similar to inflation, fluid trade and tariff policy will play a big role in this index’s behavior.
Key Economic Indicators Driving the Truckload Market
Now that we’ve covered the broader economy, let’s look at some indicators that are most closely linked to truckload market activity.
Overall, we’ve seen relative stagnation in these indicators (with the exception of imports, more on that below), perpetuating the trend of muted truckload volumes, which have, in turn, slowed down a freight market recovery.
Let’s examine the most recent available figures for industrial production, consumer spending, imports and inventories through the lens of how they are impacting truckload shipping.
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Note: Truckload Market Inflation/Deflation vs. Economic Growth/Recession
It’s worth noting that though the truckload market is linked to what happens in the wider economy, the two are not always coupled.
Given how supply and demand work in the truckload market, it’s possible for the economy to remain strong and the truckload market to languish. It’s also possible for the truckload market to inflate while the economy weakens (see the inflationary Curve in 2008 during the Great Recession).
More specifically, looking at the current environment, carriers are combating lagging freight volumes, a continuation of muted spot market rates and inflation in their overall cost structures (labor, insurance, etc.).
A continuation of these trends could topple even more carriers who have been barely hanging for the last year. Any significant reduction in the carrier base could drive up rates, even in a lower demand environment (e.g., an economic recession).
Personal Consumption Expenditures
- What is it?
How much the American consumer is spending - How it impacts truckload shipping:
The more we buy, the more we need to produce (IP) and/or buy elsewhere (imports), which translates to greater demand for truckload shipping.
While we’ve had more than two years of persistent inflation and fears of a possible recession, consumer spending has remained stable, helping to buoy the overall economy. Though the rate of growth has steadily slowed since Q4 2021, it is still growing — through Q1 2025, the Personal Consumption Expenditures index is at 5.7% year-over-year, flat from Q4.
Expectations for a recession have risen given volatility in trade policy, and consumers are putting big-ticket purchases on hold while continuing to prioritize spending on services.
Goods vs. Services in Consumer Spending
When COVID struck, service-related industries closed and, in turn, demand for physical goods (which required more freight shipping) soared to 15-year highs in an incredibly short period of time, driving a commensurately high inflationary spot market.
Over the past several years post-COVID, U.S. consumers have increased their preference for services (vacations, dining, entertainment, etc.), which has decreased physical goods’ share of wallet, resulting in less freight.
The percentage of total spending on goods has stabilized, and recently increased, but the average goods share is still tracking below the baseline average (32%) of the 2010’s. We’ll look for any increase in this to drive more freight demand in the coming months.
Industrial Production (IP)
- What is it?
Total value of physical goods America is producing - How it impacts truckload shipping:
The more we make, the more freight that needs to move, from raw material inputs to finished goods
After trending downwards for several quarters, Industrial Production had a slight bump upwards in Q1, hitting 1.5%, up from -0.3% in Q4.
While this may seem like positive news, similar to the Purchasing Manager’s Index (referenced above) and imports (referenced below), it’s likely that the increase is due to a preemptive strike against impending tariffs, and not from a sustainable increase in demand.
Imports (Goods Only)
- What is it?
Total value of physical goods America is buying from other countries - How it impacts truckload shipping:
The more we buy from other countries, the more freight that needs to move, from raw material inputs to finished goods
Imports (of goods, excluding services) ended Q1 at 14.5% year-over-year, spiking from 5.7% in Q4.
We can attribute most of this increase to the impact of tariffs, as many shippers were scrambling to replenish inventories with non-tariffed goods before updated trade policies set in.
Preliminary Q2 numbers are already showing a significant decrease in imports, and if tariffs persist, this figure will drop considerably.
Furthermore, continued consumer preference of services over goods could also have a dampening effect to import growth.
Inventory-to-Sales (Through February)
- What is it?
The ratio of physical goods businesses have in stock vs. how much they’re selling - How it impacts truckload shipping:
When inventory levels are high, it creates a delay in demand for truckload shipping, as businesses will work off excess inventory before producing new goods (IP) or buying more goods (imports).
After peaking at 1.40 in December 2022, the index has trended down slightly, staying between 1.36 and 1.39 for every month since. Through February (the most recent data available), the index is sitting at 1.36.
With the index remaining stable for the past two years, the post-COVID destocking efforts were successful, and we’re back in a more normative restocking cycle.
To that point, U.S. retailers’ inventory positions have continued to grow at a slower rate than their revenue, a sign that shippers are once again more comfortable with a “just in time” inventory strategy.
Given recent supply chain stability, combined with consumer preference for the service economy, retailers have been reluctant to build up significant inventory levels like they did in 2022 and 2023.
However, we will almost certainly see this ratio increase when the April and May data sets in, as many shippers tried to stockpile non-tariffed goods prior to tariff implementation.
Macroeconomy & the Truckload Market: Key Takeaways
- Despite continued headwinds over the past two years, the U.S. economy has avoided a recession (at least for the time being), buoyed by stable consumer spending.
- We are operating in a fluid environment — tariffs and trade policy are driving significant economic uncertainty, which has led to declining consumer confidence and rising long-term inflation expectations.
- Industrial production and imports both increased in Q1, however, this was likely driven by shippers increasing their non-tariffed inventory ahead of new trade policies. As Q2 figures settle in, these will likely drop.
- The last time the cycle went inflationary (2020 – 2021), surging freight demand drove rate growth. For this inflationary leg, the current macroeconomic outlook doesn’t support a massive spike in demand — it’s more likely that supply-side constraints (carrier attrition) will likely be the driving force.
- That said, any tariff de-escalation could spur increased demand (and subsequent supply chain volatility) in the second half of 2025.
Truckload Market Trends to Watch in Q2 2025
We have climbed out of the trough of the truckload market cycle and are well into year-over-year rate inflation.
Let’s unpack a few of the key trends impacting the market before we dive into the updated Q2 forecast.
1. Freight demand could snap back, driving truckload market volatility.
Generally speaking, freight demand (covered in detail in the macroeconomic section above) has been lagging, leading to weaker truckload volumes and stable spot market rates.
Though tariff-related volatility has not yet created a surge of truckload volume, it could later in the year.
Many shippers have paused orders (look to the recent surge in trans-Pacific blank sailings as evidence), hoping for more favorable trade policies in the near future.
If trade tensions continue to de-escalate, we could see a snap back in demand. As shippers look to build inventory ahead of Q4 peak season, there could also be a rush of orders in Q3, leading to port congestion and volatility.
2. The spot rate / contract rate dynamic continues to shift.
For the past few years, shippers have used their transportation RFPs as opportunities to bring their contract rates (aka primary rates) back towards pre-pandemic levels.
And they were largely successful — even though spot rates have already bounced off the bottom, many companies still got in one last round of reductions in late 2024.
It seems like that is coming to an end, and in Q1 2025, we saw the Cass contract rate index cross back into inflation at 1.4% year-over-year.
Here’s an overview of the spot/contract dynamic over the past several months:
- The spot market went year-over-year inflationary, but contract rates were still generally higher in absolute terms.
We experienced the longest stretch of discounted spot rates compared to contract rates in history, lasting over two-and-a-half years. - Spot rates overtook contract rates (in absolute terms) in Q4.
Over the Q4 2024 Peak Season and into January, we finally saw that trend snap, and there was an 11-week period where spot rates were finally moving at a premium to contract rates in the RXO network. - Then the two switched back in Q1.
However, by mid-February, this once again reversed, and into Q2, spot rates have consistently been moving at a 5%-8% discount to contract. However, a muted Q1 and early Q2 spot market in a soft demand environment is normal, and we anticipated this would occur.
The persistence of these low rates, both in contract and spot, is placing an immense amount of pressure on carriers.
If (and likely, when) enough carriers get driven out of the market, it will trigger a rise in spot rates.
Subsequently, those contract rates and routing guides set in the softer market of 2024 may not survive a tighter market late in 2025, when the spot market will likely become more lucrative than the contract market.
3. Summer shipping events could drive spot market volatility.
Seasonally, Q1 tends to be the slowest shipping time of the year, and 2025 was no different.
In Q2, there are several events that typically lead to capacity disruption: International Roadcheck (DOT Week), produce season and Memorial Day.
Q1 behaved the way we thought it would, and it’s likely Q2 will follow typical seasonality as well – although weakening demand associated with trade policy could mitigate seasonality.
How the carrier market absorbs these events could indicate how the rest of the year will play out.
- If we see a continuation of the past two years (a rate spike around the event, followed by rates unwinding to a slightly higher baseline), then it may spell a muted peak later in 2025.
- If, on the other hand, we start to see some sustained volatility, it would indicate that there has been enough capacity attrition to trigger a higher rise into a sustained inflationary rate environment.
4. Class 8 truckload orders continue to drop.
Looking at past truckload market cycles, when times are good for carriers (i.e., high spot rates), they order more trucks, and vice versa. Throughout much of 2023 and 2024, though truckload rates were deflationary, orders remained curiously strong.
In 2025, we have finally started seeing truckload order trends catch up to market conditions. In Q1, class 8 tractor orders (as tracked by ACT Research) were down -21% year-over-year.
This is another indicator showing the financial strain on the supply base from the prolonged soft freight market — carriers have caught up to COVID-era backlogs, and the need for incremental capacity, or the ability to turn over old equipment, is lessening.
Furthermore, maintenance costs and insurance rates on these older vehicles are higher, making them more expensive assets, which doesn’t jibe with a flat rate environment.
There was also a significant increase in order cancellations, signaling a decrease of optimism from carriers about the current market. For the time being, carriers are holding off on replacing or expanding fleets until there is additional clarity on market conditions.
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5. Carrier employment continues to wane.
Throughout most of 2023 and into 2024, driver employment figures remained curiously strong, despite weaker market conditions.
As freight volumes dropped, many drivers flocked to the security of larger fleets, which were more exposed to lucrative contract freight.
As these drivers shifted from owner-operators (who don’t show up in payroll data) to W2 employees at fleets, it boosted employment data from the Bureau of Labor Statistics (BLS). This represents a shift in driver supply, not an increase of overall driver capacity.
Throughout 2024, we finally saw carrier attrition show up in BLS employment numbers and continue to see more attrition into 2025.
All employees, truck transportation
(from the BLS, through March)
- Decreased sequentially for 17 of the past 24 months
- Decreased year-over-year for 24 consecutive months
Production & non-supervisory employees, long-distance trucking
(aka drivers, from the BLS, through March)
- Decreased sequentially for 17 of the past 24 months
- Decreased year-over-year for 24 consecutive months
Operating authorities
Though employment is trending down, Operating Authorities have shown recent growth
The FMCSA tracks carrier operating authorities (new grants, revocations and reinstatements).
As mentioned above, owner-operators do not generally show up in employment numbers. Looking at operating authority activity is another way to get a pulse check on a large, fragmented carrier base.
Recently, we’ve seen some interesting activity.
What’s typical:
Given the current difficult landscape for carriers, we’d expect revocations to outpace reinstatements and new grants.
And indeed, in Q1, there was a net decrease of over 700 operating authorities in Q1.
Furthermore, the population has declined in 21 of the last 24 months, leading to a total decrease of over 40,000 operating authorities over that time frame (for context, there were around 100,000 additions from 2020 to 2022)
What’s unexpected:
Interestingly, operating authorities actually increased in March and April.
What could be happening:
Two things could be at play here:
- Shuffling of drivers from fleets to owner-operators.
Large fleets are reducing their driver base, and these drivers are reinstating or setting up new authorities. - It’s seasonal.
Generally, in the spring, operating authority grants increase after a winter of (often) weaker freight volumes. Looking at operating authority grants in seasonally adjusted terms, net revocations were still negative in April.
Regardless, it’s unlikely that any new carriers will be able to last for long given the current environment.
Absent a market recovery, elevated insurance premiums and continued cost inflation will likely lead to continued carrier exits over the coming months, particularly those with more exposure to the spot market.
6. Language requirement enforcement could constrain capacity.
Existing federal law requires that all commercial truck drivers must: “Read and speak the English language sufficiently to converse with the general public, to understand highway traffic signs and signals in the English language, to respond to official inquiries, and to make entries on reports and records.”
On April 28th, President Trump signed an Executive Order that places a renewed and increased focus on enforcement of the English proficiency standard.
The order states that within 60 days, the Department of Transportation and FMSCA shall begin enforcing this requirement, placing non-compliant drivers out-of-service.
While the full impact of this Executive Order is unknown, it is possible that it will have a noticeable reduction in the overall driver pool.
Truckload Trends: Key Takeaways
- Not much has changed since our last update: Freight volumes are sluggish, contract and spot rates are comparable, carriers are buying fewer trucks, and carrier attrition in employment continues.
- The speed and severity of the upward climb will depend on if we get an increase in freight demand, how fast carrier capacity exits the market, or a combination of the two.
- We’re as close to equilibrium, in terms of carrier supply and shipper demand, as we’ve been in over two years. Relatively speaking, the capacity situation is much more fragile than at this time last year. With a continued difficult landscape for carriers, and (in many cases) decreasing 2025 contract rates setting in, it could set the stage for volatility later in 2025.
Q2 2025 Truckload Market Forecast
We’ve covered the macroeconomic environment, and key trends — but where does it leave us going forward?
We predict the Curve will continue its move into inflationary territory.
Though capacity and rates might feel stable, we’re in a changing environment; the carrier market is in a much more precarious place than it was over the last few years.
Q2 to Date
For the rest of the quarter, typical summer shipping trends should drive some incremental spot market volatility in Q2, however, a huge spike in rates this quarter is unlikely.
Though we’ll still remain in inflationary territory, it is possible that the index could remain flat (or even dip slightly).
Looking at Q2 to date, preliminary figures for imports, production and freight volumes are all trending down, which has led to the Curve trending down as well.
We anticipate that all these, including the Curve, should rise by the end of Q2, especially if there is some stabilization in trade policy (i.e., reduction or removal of tariffs).
2025 Outlook
Despite a couple of atypical months of operating authority growth in March and April, we expect carrier capacity to continue leaving the market (that could change given the level of economic volatility).
Though 2025 contract rates slightly increased year-over-year in Q1, spot rates are likely to continue rising at a faster rate. As spot rates overtake contract rates, this divergence will drive volatility as cash-strapped carriers look to increase profitability after a very difficult two years.
All that said, while we are in an inflationary rate environment, we don’t anticipate the sort of extreme conditions we experienced in the last inflationary market in 2020 and 2021.
Based on recent history and current market dynamics (shrinking but still available capacity, stable demand), it’s quite possible we’ll see a lower potential market peak; for guidance, a look back to 2014 would likely be a better comparison.
We may still get a more traditional peak if we experience any combination of an increase in demand, a faster-than-expected exit of carriers or a spike in diesel, but we think a conservative outlook is more likely.
A lot of it will hinge on stability (or lack thereof) in trade policy, and how shippers and consumers respond.
Procurement Tips for a Tightening Truckload Market
Don’t be too aggressive in rate cutting.
Though tempting, be prudent about where you cut rates and trim capacity — we believe the end of 2025 will look different than 2024. Short-term gains today could cost you in the spot market tomorrow.
Keep core freight providers in the game.
Even if you have limited volume and need for them now, if you think you’ll need them in a tight market, keep them engaged in your routing guide. Now is the time to maximize planning and communication with the vendors you care about most.
Q2 2025 Forecast: Key Takeaways
- We are in an inflationary spot , and spot rates, both in year-over-year and in absolute terms, will likely continue to be inflationary.
- Carriers remain under immense cost pressure, and an increase in carrier exits and/or an increase in freight demand would drive the market higher into inflation.
- In absolute terms, spot rates are lagging contract rates for now, but if this dynamic shifts during Q2, it will create pressure for shippers later in the year.
- Q2 will not likely feel like a dramatically different operating environment, but we are in a changing marketplace that may set us up for a more meaningful flip later in the year.
- The severity of an inflationary spike in freight rates largely depends on tariffs and how shippers and carriers respond.
Next Steps: Get Your KPIs in Order With the Latest Research
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