2025 Truckload Freight Rates Forecast

Arrive Logistics anticipates that spot rates will remain stable throughout the remainder of 2024 and into much of the first half of 2025, with moderate year-over-year growth influenced by typical seasonal fluctuations.

Contract rates appear to have stabilized, indicating that a floor has been established. While further reductions are unlikely as current rates approach carrier breakeven points, significant increases are also improbable as shippers maintain pricing power.

As the gap between contract and spot rates narrows, the market may become more susceptible to significant disruptions. However, given the ongoing surplus in capacity, recent hurricanes and short-lived strikes are not likely to create long-term challenges for routing guides.

Dry Van Forecast Highlights:

Van spot rates are predicted to peak at a year-over-year growth rate of 12% in Q3 2025.
Van contract rates are expected to reach a peak year-over-year growth rate of 5% in Q4 2025.
The dry van spot-contract rate spread is forecasted to narrow to $0.25 per mile by Q3 2025.

Key Insights:

Routing guides have remained stable throughout 2024 and are expected to continue that way at least through the first half of 2025, though some vulnerability to disruption may arise in the latter half.
Seasonal demand will influence regional and national rate fluctuations, making trends more predictable.

Any sustained disruption would likely require a substantial, unforeseen event, making it difficult to predict rapid growth in spot rates during the next inflationary cycle.

Reefer Forecast Highlights:

Reefer spot rates are anticipated to hit a peak year-over-year growth rate of 12% in Q3 2025.
Reefer contract rates are projected to see a peak year-over-year growth rate of 4% in Q4 2025.
The reefer spot-contract rate spread is expected to decrease to $0.11 per mile by late Q4 2025.

Demand Outlook: While freight tonnage isn't expected to significantly improve conditions, a resilient economy and stable consumer behavior are supporting relatively stable demand. Risks of an economic downturn persist, but stable routing guides will likely drive a strong share of contracts as limited demand shifts to the spot market. Recent Federal Reserve interest rate cuts may stimulate housing and lending activity, creating potential upside for freight demand, despite ongoing challenges in manufacturing activity.

Supply Outlook: The market remains oversupplied, but carriers are resilient, limiting vulnerability to near-term disruptions. The capacity surge from the previous inflationary cycle is gradually correcting as drivers exit the industry. Trucking employment remains above pre-pandemic levels. Strong compliance with routing guides for van equipment suggests sufficient capacity to meet current demand, although reefer routing guides are expected to face challenges from seasonal demand surges.

Potential Risks
This forecast outlines what we believe to be the most likely scenario based on available information. However, unforeseen events may impact the risks presented, including:

Global Tensions: Ongoing conflicts and geopolitical tensions could continue to affect global trade dynamics.
Economic Conditions: While a recession seems unlikely in the short term, uncertainty remains regarding the effects of inflation and interest rates.
Severe Weather: Extreme weather events can disrupt the freight market, as seen with recent storms, which have notable short-term impacts on truckload markets.
Carrier Profitability: Persistent low spot rates have pressured carriers, potentially leading to a market exit and establishing a rate floor.
Fuel Volatility: Fluctuating fuel prices complicate forecasting and can alter behavior among shippers and carriers, impacting market conditions.

As the market evolves, continued monitoring of these factors will be crucial for navigating the challenges and opportunities in the freight landscape.