The freight market appears to be in stasis, caused by prolonged low demand as businesses hold off to see how trade policies progress, according to a report.
The TD Cowen/AFS Freight Index, which analyzed freight data from 1,800 clients of all sizes and industries, indicated the variance between truckload and less-than-truckload demand. While TL carriers continue to see weak demand, LTL carriers display pricing strength amid economic factors.
According to the index, truckload data showed weakened trends. In Q2, average truckload linehaul cost per shipment increased 1.7% quarter-over-quarter, driven by a 1.8% increase in miles per shipment, potentially signaling stable market behaviors, the report noted.
Cost per shipment and miles per shipment typically track closely together as they’re often directly linked, explained Mingshu Bates, chief analytics officer, AFS Logistics.
Bates said that when the two metrics diverge, it often signals stronger external forces. For example, during the COVID-era, cost per shipment rose much more rapidly than miles per shipment due to surging freight demand.
In Q2, despite volatility stemming from tariffs, cost and miles per shipment moved largely in sync, which Bates pointed out suggest relatively stable market conditions.
“We will need to continue monitoring market dynamics in Q3 to see if that stability holds,” she said.
[RELATED: Truckload market recovery slows amid freight volatility]
Given the ongoing uncertainty on tariff policies, the report pointed out it’s still uncertain whether this trend signals a structural shift or a temporary coincidence.
Trade policy continues to be uncertain and as a result, businesses are opting for a wait-and-see approach and delaying spending decisions, said AFS CEO Andy Dyer.
“With no catalyst to ignite demand, some carriers are buckling under the pressure of unrelenting low volumes while others are deploying all available mechanisms to capture revenue,” Dyer said.
AFS Freight
After peaking at 25.7% in Q1 2022, truckload freight rates continue to face downward pressure, driven by sustained excess capacity in the market, according to the report. However, continued carrier exits, coupled with newly regulatory guidance imposing stricter labor and English language proficiency requirements for truck drivers, may help alleviate some of the rate pressure in the near term.
[RELATED: What fleets should know about recent regulatory changes]
The TL rate per mile index points to a tenth consecutive quarter of rates hovering near the bottom, with Q3 2025 projected at 5.6%, reflecting a 1.0% year-over-year increase.
Meanwhile, LTL remained soft in Q2, according to the report. Bates said this reflects a broader cooling of freight demand from pandemic-era highs, a trend that’s touched nearly every sector. Yellow Corp.’s bankruptcy in mid-2023, and the resulting reduction in capacity helped stabilized LTL rates at elevated levels. However, entering this year, the freight industry speculated when the market might turn.
“What we’re seeing now is the effect of unsettled trade policy and an uncertain economic outlook weighing against demand, and absence of any catalyst that could ignite an uptick,” said Bates.
As soft demand persists and trade policies add challenges, less-than-truckload carriers are focusing on strict revenue management, the report pointed out.
AFS Freight
In Q2, LTL weight per shipment fell 5.1% year-over-year, while cost per shipment only fell 2.9%, which the report noted indicated that carriers holding firm on pricing and emphasizing revenue management strategies.
Conversely, LTL cost per shipment declined 1.6% quarter-over-quarter, driven by a 1.8% quarter-over-quarter drop in average weight per shipment and a 1.3% decrease in fuel surcharges. These headwinds were partially offset by a 3.6% rise in average length of haul, the report noted.
The report listed demand softness and shifting trade policies as additional challenges for the LTL market.
The ISM Manufacturing PMI experienced its fourth consecutive month of contraction in June 2025, which the report note may suggest that LTL freight recovery may be prolonged.
For the LTL market, shifts in manufacturing output and order volumes remain important demand signals, Bates said.
Despite ongoing market uncertainties, the LTL rate per pound index projects Q3 to reach 65.9%, marking a 1.0% year-over-year increase, driven by seasonal factors and carrier pricing actions.
While part of the ongoing decline in weight per shipment reflects mode shifting, Aaron LaGanke, vice president, freight services, at AFS, said that it signals that carriers are handling lighter pallets due to soft LTL demand.
“The continued resilience of the rate per pound index shows the effect carrier pricing discipline, and the upcoming NMFC (National Motor Freight Classification) transition to a density framework should equip carriers with another method to tightly manage freight classification and pricing,” LaGanke said.
The change to the NMFC’s system, which involves a shift to a density-based classification model, commenced on July 19.
Bates also said monitoring driver availability, capacity exits, and financial stability of major carriers are factors that could shift TL and LTL dynamics in the coming months.
Spot vs. contract rate trends, tender rejection rates, fuel costs, and service reliability are critical for assessing pricing pressure and capacity constraints, she added.
Discussing spot rates and volumes for Q3, DAT Freight & Analytics principal analyst Dean Croke said he expects freight demand to remain steady in the second half of the year, with volumes likely holding flat year-over-year in line with current trends.
Given the ongoing trade war and tariff uncertainty, DAT don’t expect shippers to push significantly more freight into the market during what’s traditionally considered peak season. “We expect it to be flat at best as we suspect peak season has already occurred,” said Croke.
Croke added it’s likely that there would be usual pockets of higher demand and rate spikes in the reefer market around Thanksgiving, but that’s a predictable, seasonal occurrence.
