With the pull-forward of tariff demand now in the rearview, and consumer activity dampened in a weak jobs environment, the freight market at the start of Q4 continues to be challenged in terms of volume.
Carriers have been trimming their fleets to stay in line with lower demand and refining their shipper portfolios, dropping underperforming lanes and contracts in an effort to maintain profitability during the seemingly endless freight recession.
Looking ahead to Q4 and the holiday peak season, demand is expected to remain muted, with retailers projecting lower year-over-year container volumes in October, November, and December, per Hackett Associates and the National Retail Federation. That said, all of this bodes well for shippers in terms of pricing power, although carriers have still been increasing rates as they cull excess capacity.
Here’s more on what transpired in Q3 and a look ahead to Q4 in freight and the overall market.
The Broader Market
In August, the Logistics Managers’ Index (LMI) showed transportation capacity was expanding faster than prices, weighing down the overall index. Transportation prices were down 6.9% for the month, while utilization fell 4.8%, leading to what was termed a “mild negative freight inversion.”
The closely watched Cass Freight Index for shipments fell 1.5% month over month in August, after dropping 1.8% in July. Linehaul truckload (TL) rates were down 1.8% month over month, three times higher than July’s 0.6% decline. While the overall shipments index was down, TL freight increased while less-than-truckload (LTL) “declined significantly,” according to Cass.
The Baltic Dry Index from the London-based Baltic Exchange, which tracks rates for bulk shipments of raw materials, was up nearly 10% for the month of September. This a positive sign as a leading indicator of demand for materials that turn into finished goods for consumer and B2B markets. Experts say the lag time between a rise in the BDI and increased trucking demand for shipping finished goods is typically three to six months.
As of Sept. 12, the BDI was up nearly 3x from its 2025 low, and at its highest level since December 2023, which could be a positive sign for trucking demand in Q1 2026.
Truckload Trends in Q3
Truckload spot rates, volumes and tender rejections all remained soft at the tail end of Q3, causing Susquehanna Financial Group to reduce its earnings estimates for all TL carriers except C.H. Robinson. Spot rates had increased 6.5% in Q2, according to RXO’s The Curve report.
With overall trucked freight demand down, contract rates for truckload have been doing somewhat better, as spot rates generally rise when capacity is tight. A TD Cowen analyst told Trucking Dive that contract rates have been seeing single-digit gains, not great for carriers but better than the spot market.
A 25% decline in Class 8 truck builds between May and June of this year was indicative of the drop in overall freight demand as manufacturers tapped the brakes on production to match the reality. The June decrease was 36% year over year, according to ACT Research.
How LTL and Parcel Fared in Q3
Some of the top LTL carriers saw a volume decline in August, citing softness in manufacturing and housing, according to Commercial Carrier Journal. Old Dominion Freight Lines saw its tonnage drop 9.2%, while XPO was down 4.7% and Saia fell 2.2%. ArcBest was up 2%, with the carrier saying it was adding “new core LTL business.”
Yet the cost of both TL and LTL rose in August despite soft demand, according to the Bureau of Labor Statistics (BLS). Carriers rationalized capacity based on current and projected demand to justify price increases. The TL Producer Price Index (PPI) was up 1.8% versus July, but down 0.2% from a year ago. The LTL PPI, meanwhile, was up 1.5% and 10.5%, respectively, for the same periods.
The reclassification of LTL for pricing purposes by the National Motor Freight Traffic Association (NMFTA), which took effect in mid-July, was not the “Y2K moment” that many had been fearing. Helping this along was a decision by FedEx Freight, the largest LTL player, to delay enforcement until December. In essence, the new classification switched from a weight-based to a density-based system.
On the parcel side, volumes have also been declining, yet FedEx still announced a standard 5.9% general rate increase (GRI) for 2026, with UPS expected to follow suit, per usual. And the GRI is only the beginning of parcel rate hikes, when you factor in accessorial fees and other factors buried in the major carriers’ pricing tables.
Q4 Freight Outlook
According to analysts contacted by the Journal of Commerce, the TL market is in a deep rut (subscription required), with no immediate signs of a catalyst to reverse the decline in Q4. The fact that shippers still have pricing power “tells us that there’s plenty of truck capacity,” Dean Croke, principal analyst at DAT Freight & Analytics, told the JOC.
LTL executives, meanwhile, weren’t ready to call a market turn north when looking ahead to the wrap-up to a rough 2025 on late August earnings calls. A lingering of tariff-related uncertainty into Q4, plus lack of the typical August-September bump from peak inventory loads, is hedging their optimism.
Intermodal transport will continue to see strong momentum, growing sequentially as well as year on year, as shippers look to a cost-effective alternative to long-haul trucking. Union Pacific Railroad, facing strong intermodal demand, imposed peak surcharges out of Southern California on low-volume shippers and those that exceeded weekly allotments.
According to the Intermodal Association of North America (IANA), intermodal volume increased 8.5% in 2024 and 2.5% in Q2 2025. Growth in Q2 was stronger in international container volume (3.9%) than domestic containers (2.6%). Surging imports and consumer spending, along with domestic manufacturing, were cited as drivers.
Q4 Recommendations for Shippers
Heading into Q4, here are some recommendations for shippers as they navigate a volatile freight market:
- Review contracts and rate schedules now, particularly in high-volume or tight capacity lanes.
- Monitor fuel trends and include flexible clauses or surcharges in contracts.
- Diversify your carrier base; include backup providers to handle seasonal disruptions.
- Use data analytics and TMS to identify lanes where spot versus contract decisions need rebalancing.
Whichever Way Q4 Turns, an Expert in Your Corner Is a Good Bet
While a freight recession on its face seems to favor shippers, as carriers struggle to gain volume and loads, rates still continue to rise as capacity is shed. Intermodal has become a safe haven for some, but doesn’t fit neatly into everyone’s plans.
Wicker Park Logistics, a woman-owned logistics company and WBENC Certified Business, has been helping shippers successfully execute their transportation strategies since its founding in 2021. Based in Chicago, Wicker Park provides transportation and supply chain services through an innovative, technology-driven model that prioritizes transparency and flexibility.
Whether you’re looking for TL, LTL, last mile, intermodal, or expedited, dry van, reefer or flatbed, Wicker Park can craft a personalized solution that meets your exacting demands and requirements. To find out more, get in touch for a quick quote.
