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Truckload demand has been declining for months and is expected to continue to dip due to tariffs and other economic factors, according to several experts.
A 1% increase in tariffs could reduce truckload demand by 0.15% or more, while a 10% rate could bring demand down by 2%, according to an Uber Freight Q2 market update and outlook. A rate of 18% to 28% has a risk of bringing demand down by 4% to 6%.
With tariffs bringing prices up it could lead to consumers to buy less. Less consumer demand will lead to a decrease in items for trucks to haul. This scenario can be seen playing out at the Port of Los Angeles.
The Southern California port reported truckers are hauling less freight due to tariffs, according to a media briefing last week. The port saw May cargo volumes dip 5% year over year and go down 19% compared to April.
Shifting consumer demand and buying patterns are a major concern for truckload carriers, Dean Croke, DAT iQ industry analyst, told Trucking Dive in an email. These patterns contribute to lower freight volumes across various types of truckload shipments. As a whole, U.S. truck freight tonnage declined 0.3% in April after a 1.5% dip in March.
Reefer carriers are experiencing their second consecutive year of a soft market, Croke said. Reefer rates are falling behind 2023 rates — the last year that the reefer market saw typical seasonality, according to data from DAT. “This year, like 2024, produce harvests are later and shipping volumes are lower. Coupled with the ongoing oversupply of trucks, these factors explain why spot rates have fallen below 2023 levels,” Croke said
Another factor impacting truckload demand is manufacturing patterns. Croke described the state of the truckload market as “flat.”
“Domestic manufacturing, which accounts for the majority of truckload freight, is trending in the wrong direction as measured by the ISM PMI,” Croke said.
The Institute for Supply Management’s Purchasing Manager’s Index decreased from 48.7 in April to 48.5 in May. The decline signals a third consecutive month of contraction in the manufacturing sector, according to Uber Freight.
Backlogs and new orders indices below 50 suggest a weakening of future demand, Uber Freight said. The indices also fell below its lowest levels since June 2009 in response to halted or paused imports due to tariffs.
Last year was tough for truckload carriers, financially, and this year will not be different, Croke said.
“With the trade war occurring in Spring/Q2—a time when carriers typically expect higher volumes to offset slower first-quarter performance—they’ll be playing catch-up for the rest of the year,” he said.
Conditions could become even more challenging if demand doesn’t improve, Croke said, and if the economy slips into recession territory. It could be argued that the freight recession has yet to end since it began in 2022, Croke said, due to declining spot rates, oversupplied capacity, higher operating costs and weaker demand for truckload services.
