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As usual, in this Monthly Market Update, we will (a) provide a brief update/analysis of the truckload market and (b) present a compelling economic analysis to provide a macroeconomic view on the state of the freight market.
Full Truckload Market Overview
Loadsmart’s top 30 spot rate forecast
DRV Spot rates rose 2% MoM, undershooting our 3% projection. Our model now forecasts a 6% MoM rate increase in June, due to seasonal pressures and temporary tariff relief. Yet even though rates may improve on a MoM basis, our model still indicates a YoY contraction for the rest of 2025.
- CVSA Roadcheck Week (13–15 May) may have kick-started the mid-May uptrend in spot rates. SONAR confirmed the market squeeze, as the National Truckload Index increased by around 2%, and the Outbound Tender Reject Index climbed from 5.2% to 6.5% during the week that straddled the Roadcheck (12-18 May) - its highest reading since early January.
- On the demand side, two dynamics are currently at play, and should continue to push rates upwards until August:
- Firstly, the 2025 produce season freight demand is following its typical south-to-north progression: Florida is the first to tighten in May, followed by Georgia in June, with California and Arizona dominating in July. As usual, this should temporarily reduce DRV spot capacity in these origin markets.
- Secondly, the 90-day suspension of new US–China tariffs (until July) has prompted importers to pull forward orders, resulting in the re-routing of vessels and an additional ~400,000 TEU of capacity arriving in the West Coast in June and July. This will increase demand for drayage and transloading in Southern California, and potentially trigger follow-on freight surges at inland rail hubs such as Dallas/Fort Worth, Memphis, Chicago, Kansas City, and Atlanta in the next two months.
- But beyond the short-term shock, underlying freight demand should remain muted:
- Nominal consumption spending increased by 5.5% YoY in Q1 2025 - which is identical to Q1 2024 - but much of this rise still reflects the pull-forward effect of the new tariffs. Once this boost fades, consumer spending should start growing at a slower pace, as payroll income is currently growing at only around 2% SAAR in Q2 - down sharply from 5.8% in Q1.
- On manufacturing, May's ISM headline PMI is barely above neutral at 52 points (indicating weak expansion), while its production sub-index hovers near 50. Tariff-driven input costs and high borrowing costs should curb new orders in the second half of 2025, leaving industrial freight demand essentially flat.
1 - Source: Sea-Intelligence, 3 June 2025. 2 - Source: BEA, GDP & Personal Consumption Expenditures, 1Q 2025. 3 - Source: BLS CES & Employment Situation data retrieved via FRED.
