Freight Rates Plunge, Market Under Strain

Is Now a Good Time to Ship?

Freight Rates are diverging: TL pricing remains near the bottom, while LTL is edging higher.

U.S. freight demand remains weak. Both truckload (TL) and less-than-truckload (LTL) carriers are getting fewer shipment requests as businesses delay sending goods.

Why? Because no one knows what’s coming next with tariffs and trade policies. Add weaker consumer demand and economic uncertainty, and most companies are holding off on inventory and shipments.

Freight Rates — TL vs. LTL

TL capacity is still oversupplied. That’s keeping rates low — they've stayed near the bottom for 10 straight quarters and just dropped another 0.4% from last quarter, even though they’re still 5.6% above 2018 levels.

Some small carriers are exiting the market, but not fast enough to ease the oversupply. Many are struggling to survive, while others are trying to hold on through tighter cost control.

LTL, on the other hand, is holding up better. Carriers are focusing on profitable routes and reliable customers instead of chasing volume with discounts. As a result, LTL rates are rising slightly. The LTL Freight Index is projected to reach 65.9% — up 1% from 2018 — marking its 7th straight quarter of year-over-year growth.

Even with lighter shipments (down 5.1% in weight), costs per shipment only dropped 2.9%, showing that LTL carriers are protecting margins.

A major pricing shift is also underway: on July 19, the NMFC system changed from product-based to density-based freight classification. This will give carriers more pricing power by aligning charges more closely with actual shipping costs.

And one more factor to watch: upcoming Trump-era regulations could shrink the truck driver pool, potentially affecting TL capacity and pricing in the months ahead.