Executive Summary
While the transportation industry and broader economy in 2024 could best be characterized by a delicate balance of mixed signals, the trajectory in 2025 has been markedly more volatile. After early indicators in January suggested a shift toward a slightly more optimistic outlook, deteriorating economic and freight market conditions in February may have signaled a turning point toward a more negative trajectory.
Recent economic trends have shown signs of weakening, particularly within the consumer segment. After accounting for 68% of U.S. GDP in Q4 2024, consumer resilience appears to be faltering. The University of Michigan’s Consumer Sentiment Index declined sharply in February, registering a 10% drop from January and a 16% decline compared to February 2024. Inflation-adjusted consumer spending fell by 0.5% in January – the first decline in nine months and the largest single-month drop since February 2021. Similarly, preliminary estimates indicate that real spending on goods contracted by 1.7% in January, marking the steepest decline since July 2021. Other areas of economic softness included a 0.1% decrease in manufacturing output and a nearly 10% drop in housing starts in January, accompanied by a substantial decline in both new and existing home sales.
Despite these challenges, not all economic indicators reflected weakness in February. The labor market remained relatively resilient, with preliminary estimates indicating a net gain of 151,000 jobs, though the unemployment rate edged up from 4.0% in January to 4.1% in February. Meanwhile, the Bureau of Economic Analysis (BEA) maintained its second estimate of Q4 2024 Real Gross Domestic Product (GDP) growth at an annualized 2.3%, following a strong 3.1% expansion in Q3 2024. However, the Atlanta Fed’s GDPNow model, a widely followed real-time estimate of GDP growth, projected Q1 2025 annualized growth at -2.4%, an improvement from its previous estimate of -2.8%. While the GDPNow model has historically been among the most reliable, its latest projection is an outlier compared to equivalent Nowcast model estimates from the New York Fed (+2.7%) and the Dallas Fed (+2.2%). It is important to note that GDPNow is not an official Federal Reserve forecast but rather a real-time estimate based on available economic data.
Within the transportation sector, early signs of a truckload market recovery observed in January largely dissipated in February as declining freight demand underscored persistent excess capacity issues. Unlike the previous month, minimal disruptions in February led to greater available capacity and a sharp decline in rates. In contrast, the rail sector continued to reclaim market share lost to trucking, with overall volumes reflecting further annual growth. However, ongoing competition with the weak truckload market has forced rail providers to operate at discounted rates.
In the maritime sector, U.S. containerized import volumes remained strong in February despite seasonal softening from January levels. According to Descartes’ March 2025 Global Shipping Report, U.S. container imports for February totaled 2,238,942 twenty-foot equivalents (TEUs), representing a 10% decline from January but a 4.7% year-over-year increase compared to February 2024. Despite a noticeable drop in imports from China due to the Lunar New Year and the 10% tariffs imposed by the Trump Administration, February’s import volumes were the second-highest on record for the month, trailing only February 2022 by approximately 73,000 TEUs.
Industry Overview
February Key Figures (YoY)
| Truck Data Points | YoY% Change |
| DAT Spot Rates (incl. FSC) | -2.0 q |
| Fuel Prices | -9.1 q |
| ACT Class 8 Preliminary Orders | -34.0 q |
| ATA NSA Truck Tonnage | 0.3 p |
| Cass Freight Index | 0.8 p |
| Cass Freight Shipments | -8.2 q |
| Cass Freight Expenditures | -4.2 q |
*Report released on 2/18/2025
**Report released on 2/14/2025
Main Takeaways
Economy
Manufacturing activity remained in moderate expansion territory in February despite a contraction in demand. Continue reading...
Truckload Rates
Average spot rates declined sharply while average contract rates remained unchanged. Continue reading...
Truckload Demand
A surge in inventory levels failed to translate to freight volumes as declines in demand underperformed typical seasonality. Continue reading...
Truckload Supply
Ongoing supply contractions have resulted in a tighter market compared to years past but still remains elevated compared to demand. Continue reading...
Truckload Capacity Outlook
Declines in the carrier population have continued to stabilize but remain well above pre-pandemic levels while payroll figures have essentially normalized. Continue reading...
Fuel
Average fuel prices registered moderate increases in February as markets stalled amidst policy uncertainty. Continue reading...
Dry Van
Tariff uncertainty and declining demand levels resulted in a significant drop in average rates. Continue reading...
Reefer
A shift away from freeze protect services as temperatures warm up led to softer demand and lower rates across the reefer sector. Continue reading...
Flatbed
Average rates remained flat MoM despite warmer weather leading to an increase in flatbed activity. Continue reading...
Intermodal
Growth in intermodal volumes continues to keep overall volumes elevated YoY despite further weakness in carload volumes, while rates remain near historic lows. Continue reading...
Further Reading
- Trump Set to Proceed With Tariffs on Canada, Mexico, China | Transport Topics
- ILA membership ratifies new Master Contract with the USMX | Logistics Management
- Freight markets at “equilibrium” have truckers, shippers cautiously optimistic | DC Velocity