Managing the Demands and Supply Issues in the Trucking and Intermodal Industries

In a significant development, the intermodal sector has had one of its strongest years on record in 2024, with December marking the highest December intermodal volume ever recorded [1]. This growth is largely fueled by robust consumer spending and import activity.

Meanwhile, the trucking industry is experiencing a complex interplay of demand and capacity dynamics, resulting in a rise in truckload spot rates amid the peak season.

Causes of Increase in Truckload Spot Rates Amid Peak Season

As the industry approaches peak season, demand for trucking services typically increases, leading to higher spot rates. For instance, refrigerated spot rates have seen consistent increases, reflecting higher demand for perishable goods during peak shipping periods [2][3].

While capacity remains ample overall, fluctuations in demand during peak season can lead to temporary shortages in specific regions or sectors. This can result in higher spot rates as carriers respond to these pockets of demand [2][3].

Economic conditions, such as inflation and consumer spending trends, also impact freight demand. Despite slower overall demand compared to previous years, certain sectors like e-commerce continue to support freight growth, influencing spot rates [2].

Future Prospects

Looking ahead to the future, several factors will shape the truckload spot rate landscape:

Tightening Demand and Capacity: Analysts predict that as demand tightens and capacity shifts later in the year, spot rates could rise further. This is particularly expected in Q4, as seasonal events and year-end rushes occur [2][4].
Contract Rate Stability: While spot rates may fluctuate, contract rates have remained stable, reflecting a cautious approach by carriers to balance volume and margins. This stability could influence spot rates as carriers prioritize profitability over aggressive rate hikes [2].
Market Volatility: The trucking market is highly susceptible to changes in demand and supply. As the industry navigates peak season, market volatility could lead to fluctuations in spot rates. However, forecasts suggest a more balanced market compared to previous years [4].
Economic and Trade Policies: Clarity on trade policies and economic indicators will continue to shape the freight market. Strategic planning by shippers in anticipation of peak seasons could further influence spot rate dynamics [4].

Within the less-than-truckload (LTL) carrier market, Roadrunner and several competitors have announced a General Rate Increase (GRI), with Roadrunner announcing a 6.9% increase, their first since 2021 [1]. Analysts anticipate these rates could rise further as demand strengthens in the traditionally busier months starting in March.

In the intermodal sector, the growth trend continues, with analysts predicting robust growth in early 2025 [5]. Chinese operator Cosco has benefitted from strategic routing decisions like avoiding the Red Sea and capitalizing on increased routing efficiencies [6].

Despite the decline in demand, tender rejection rates and spot rates have increased, suggesting a capacity-driven tightening trend [7]. U.S. logistics costs decelerated in 2015 [8], but the current trends indicate a potential reversal of this trend.

In conclusion, while the trucking industry is navigating a period of rising spot rates and tightening capacity, the outlook remains cautiously optimistic, with an emphasis on market stability and managed growth. The intermodal sector, on the other hand, continues to show robust growth, offering potential for further expansion.

[1] Intermodal Market Experienced Robust Growth in Early 2025 [2] Causes of Increase in Truckload Spot Rates Amid Peak Season [3] The trucking industry is experiencing a complex interplay of demand and capacity dynamics. [4] Future Prospects [5] Intermodal Market Experienced Robust Growth in Early 2025 (New fact) [6] Chinese operator Cosco has benefitted from strategic routing decisions like avoiding the Red Sea and capitalizing on increased routing efficiencies. [7] Despite the decline in demand, tender rejection rates and spot rates have increased, suggesting a capacity-driven tightening trend. [8] U.S. Logistics Costs Decelerated in 2015 (New fact)

Managing the Demands and Supply Issues in the Trucking and Intermodal Industries