The second quarter of 2025 didn’t deliver as hoped in terms of trucking volume for freight, and Q3 isn’t looking a lot better as the tariff pause ends and uncertainty clouds both the global and domestic picture and rates stagnate.
While S&P’s Purchasing Managers’ Index (PMI) was in expansion territory for June based on domestic manufacturing activity, other indicators were pointing south in terms of demand signals for trucking.
“No one knows where this market is really headed at the moment, or at least until trade policy gives shippers more confidence,” said Dean Croke, principal analyst at DAT Freight & Analytics.
“Q2 failed to deliver, with more trucks than loads as the market bounced around equilibrium.”
With trucking capacity continuing to exit the market, and hopes of trade agreements this summer, conditions could yield an inflection point that would drive demand and rates upward in the back half of 2025.
Q2 Snapshot: Weak Freight Demand, Soaring Costs
In May, trucking tonnage slipped 0.1% from the previous month, after posting an 0.5% gain in April, according to the for-hire truck tonnage index from the American Trucking Associations (ATA). This stagnant demand provided little momentum heading into Q3.
“The seesaw freight demand pattern continued in May, making it difficult to discern any clear pattern in the market,” said ATA Chief Economist Bob Costello in a news release, adding that the “goods market is all over the map, thus impacting freight levels. Construction is soft, manufacturing is up and down, and consumers are cautious.”
Truckload (TL) demand remained sluggish throughout Q2, with weak volume reported across the board and many fleets operating at negative margins. According to ACT Research, the freight recession showed signs of deepening, exacerbated by unresolved trade disputes and erratic goods movement. Despite some relief as inflation slowed, it remained stubbornly persistent, keeping operating costs high even as rates failed to show meaningful gains.
Another issue is how high operating costs are forcing more carriers to sell or close their doors, bringing capacity down. This is why partnering with an experienced freight broker will help alleviate capacity constraints in Q3 and into Q4.
FreightWaves data pointed to continued softness in TL spot markets, where capacity remained loose and rates flatlined.
The biggest concern in TL, according to Croke, was dry van spot rates going negative in June after being “slightly positive” for 10 months. DAT expects to see spot rates continue to be flat to down.
“Negative year-over-year spot rates typically indicate the market is flipping and heading into recession territory again,” Croke said. “Produce volumes are down this year, as are reefer spot rates, so I expect negative year-over-year rates in reefer will continue into July. Flatbed year-over-year spot rates will be negative soon.”
In the less-than-truckload sector, the LTL Producer Price Index (PPI) from the Bureau of Labor Statistics (BLS) held steady in Q2 despite weak demand. The PPI for long-distance LTL freight increased 5.4% from a year earlier.
“LTL pricing discipline appears to be holding,” Jason Miller, interim chair of Michigan State University’s Department of Supply Chain Management, told Trucking Dive.
The publication also reported decreases in tonnage per day and shipments per day during May at major LTL carriers Old Dominion, Saia, and XPO. ArcBest bucked the trend, with total tons per day rising 5% in May.
Cost Pressures Impacting Carriers
The average cost per mile of operating a truck in 2024 was $2.26, down 0.4% from the previous year, according to the American Transportation Research Institute (ATRI). But when you back out fuel costs, which declined 7 cents last year, operating costs actually went up 3.6% to $1.779 per mile. Truck and trailer payment costs were the primary driver of the increase, ATRI reported.
Regulatory Mixed Bag: Trucker Support, Enforcement of English Proficiency
Based on an April executive order from President Trump, Department of Transportation Secretary Sean Duffy announced a number of initiatives in June aimed at making life easier for America’s truck drivers.
The package includes funding to increase truck parking nationwide, dialing back mandates on truck speed limiting devices, simplification of regulations, and cracking down on “double brokering,” in which freight brokers resell loads to other brokers at a profit.
Another government move is expected to reduce the number of CDL holders in the U.S. A separate Trump executive order requires truck drivers to demonstrate English language proficiency (ELP) in order to read road signs and interact with law enforcement. In June, 40 drivers from Mexico lost their commercial licenses for failing to comply with the new law. An estimated 10% of CDL holders could be affected.
“We are definitely seeing a rate increase happening right now on bidding on northbound freight” as a result of the measure, Cargado co-founder and CEO Matt Silver told FreightWaves. This has led at least one enterprising Mexican trucking firm to sponsor English classes for its drivers.
Q3 Outlook: Mild Optimism Mixed With Caution
Looking ahead to Q3, the trucking industry faces a sluggish landscape shaped by weak freight volumes, ongoing tariff uncertainty, and soft market conditions. While some indicators like the S&P U.S. manufacturing PMI show pockets of resilience, freight-specific demand has yet to follow suit. Spot rates remain flat or negative across most segments, especially dry van and reefer, signaling continued imbalance between supply and demand.
Tariff-related volatility and unclear trade policy are dampening shipper confidence. However, with more carriers exiting the market and the potential for bilateral trade deals on the horizon, analysts see a path toward recovery. A seasonal bump tied to retail restocking and reduced truck availability could lift rates modestly in late Q3. Until then, most fleets will continue to navigate margin pressure, low volumes, and cost uncertainty in a wait-and-see environment.
What Shippers and Carriers Should Focus On
With Q3 shaping up to feature more volatility, shippers should prioritize cost control and long-term positioning. Freight analytics and routing optimization can help mitigate margin loss as rates stagnate and fuel price volatility lingers. For high-volume or long-haul lanes, diversification, especially intermodal or consolidated LTL, can drive cost efficiency without sacrificing service.
Shippers should also solidify strategic carrier relationships. Locking in favorable contract rates while capacity remains loose will pay dividends later in the year if tightening materializes. Clear communication, flexibility, and transparency will be key to ensuring reliable service in a turbulent market.
Finally, be aware of policy shifts, particularly around tariffs, equipment mandates, and labor rules. Participate in industry groups like the Council of Supply Chain Management Professionals (CSCMP), the National Industrial Transportation League (NITL), or the Shippers Council of Freight Transportation Research (FTR) for advocacy and to stay on top of key issues.
Navigating the Road Ahead
Q2 was tough for trucking, with record high costs and flat demand. Cautious optimism for Q3 hinges on the resolution of trade policy, a capacity bottom, and a boost from seasonal demand based on lower inflation. Although uncertainty lies ahead, well-informed planning and strategic partnerships with logistics providers will help shippers successfully navigate what’s next.
Wicker Park Logistics, a woman-owned logistics company and WBENC WBE-Certified Business, provides dependable transportation services across industries. Our deep sector expertise, cloud-based platform, and consultative approach combine to help you find the most efficient transportation based on your budget and service level needs.
We offer reliable service across equipment types (FTL, LTL, flatbed, etc.) and services (reefer, expedited, last mile, intermodal, etc.) across North America, and a high level of visibility into each shipment from door to door. To learn how Wicker Park Logistics can help manage your transportation in a volatile market, get in touch for a quick quote.