#United States #Atlanta #AFS Logistics #TD Cowen #Freight Index

Overview of the Q3 Freight Market

The Freight Index report from AFS Logistics and TD Cowen has just been released for Q3 2025, illustrating the challenges facing the freight industry amid economic uncertainty. With international trade policies still off balance and demand remaining low, the freight market continues to face stagnation. Data indicates that the truckload pricing has seen ten consecutive quarters of decline, while less-than-truckload (LTL) carriers are focused on managing their revenues amid weaker volumes. Parcel services, too, are grappling with the need to regain control over pricing strategies.

Truckload Market Stagnation

After experiencing an elevation in truckload rates earlier in 2022, the sector has now reached alarming lows. The report highlights that the truckload rates remain only slightly above their baseline from January 2018, with projections showing a further decline as we approach Q3. The persistent issue of excess capacity has tempered rate growth, forcing carriers to consider operational changes. Ongoing challenges in trade policies and slow recovery may be compounding these difficulties, leading some carriers to struggle with maintaining revenue.

LTL Market Dynamics

On the other hand, LTL carriers appear to be adapting to the softer demand by tightening revenue management strategies. The decline in weight per shipment suggests a shift in operational tactics; meanwhile, the LTL rate per pound index has showcased a positive trend. Despite the challenges, carriers have successfully navigated their pricing mechanisms, allowing them to maintain profit margins in a tightening market. The upcoming transition to a density-based framework is anticipated to further support LTL pricing strategies.

Parcel Market Adjustments

As for the parcel services, companies such as UPS and FedEx are engaging in aggressive tactics to regain their pricing power. After a prolonged period of heavy discounting, carriers are adjusting their pricing structures and rethinking surcharge strategies, which may have been previously viewed as standard cost-recovery methods. This change comes as a response to high labor costs and varying demand while also aiming to meet earnings expectations. The expected trend indicates that while parcel rates would be on the rise, they also reflect a strategic repositioning by the carriers.

The Bigger Picture

The overarching theme illustrated by the TD Cowen/AFS Freight Index is a freight market currently hindered by economic uncertainty, leading businesses to adopt a cautious wait-and-see approach regarding their spending. The decline in cargo demand has evident ripple effects across different transport sectors, highlighting the urgency for companies to reassess their strategies to navigate through these turbulent times. Overall, the insights garnered in this index reveal a freight market in need of a catalyst for recovery, as stakeholders continue to look ahead for possibilities of growth amid ongoing challenges.