Truckload and less-than-truckload pricing showed some improvement in Q1, but tariff-heavy U.S. trade policies could prolong soft demand, according to the TD Cowen/AFS Freight Index released April 8.
"Tariffs have become the topic du jour in boardrooms and beyond, and combining those policy changes with a cloudy macroeconomic picture is a recipe for the uncertainty and caution that characterize current market sentiment," Andy Dyer, CEO of AFS Logistics, said in a news release.
Amid back-and-forth in tariff applications from the Trump administration, shippers have pulled inventory forward to get ahead of potential disruptions. The frontloading helped truckload rates to come in higher than expected at 5.9% above the January 2018 baseline, the report said.
There was also a shift toward shorter-haul shipments, driving the total cost per shipment down to 5% above pre-pandemic levels, hitting the lowest point over three years. The downward pressure is “indicative of a broader trend of more regional distribution and decentralized inventory positioning,” according to the report.
In Q2 2025, the rate per mile index is projected to decline to 5.5% from the previous quarter, marking the ninth straight quarter with rates between 4.3% and 5.9% above the 2018 baseline, per the report.
To get ahead of tariffs, retailers continue to bring as much merchandise into the country as possible, Jonathan Gold, VP of supply chain and customs policy at the NRF, said in a March press release. The U.S.' tariffs on Canada and Mexico could impact the flow of truck and rail-driven cargo between those countries.
Shippers have also pulled forward cargo imports such as machinery, lumber, metals and oversized flatbed freight to mitigate tariff uncertainty, DAT Principal Analyst Dean Croke told Trucking Dive in an email in March.
The LTL market, on the other hand, takes longer to feel the impacts from macroeconomic forces and changing trade policy compared to the truckload market, according to Aaron LaGanke, VP of Freight Services at AFS.
At this time, LTL carriers are effectively navigating a low-demand environment and are focusing on profitable lanes, contractual relationships and reliable freight, rather than chasing volume with pricing concessions, LaGanke said in the release.
“After 26 months of contraction, the purchasing managers index finally reversed course with two months of growth early in Q1 2025, but March data shows it’s back to contraction, which underscores some of the headwinds facing the freight market,” LaGanke said.
The net fuel surcharge per LTL shipment increased 4%, high enough to overcome decreased haul lengths and sustained low weight.
For Q2, the freight index forecasts the LTL rate per pound index to be at 63.4%, a bit of a drop quarter over quarter, but a 0.7% year-over-year increase. That would result in the sixth consecutive quarter with a positive YoY trend.
