LOUISVILLE, Ky. — In an interview with The Trucker managing editor Linda Garner-Bunch, DAT Freight and Analytics principal analyst Dean Croke speaks about the status of the freight market and the potential tariffs have to further mar an already downtrodden industry.
“It’s not really good news what’s happening in the freight market,” Croke said. “Best case scenario is that the freight market is going to be in a bit of a slump for the next six months. That’s our best case scenario. Supply chains and shippers are kind of in a paralysis mode. It’s a wait and see attitude, because none of them really want to make business or investments decisions not knowing.”
Q1 Blues
“There’s a lot of uncertainty in the market and of course we’re coming out of Q1 which is always the slowest quarter in freight,” Croke said. “March hasn’t been really good. Normally, in March, that’s kind of the money making month in the spot market for carriers. Coming out March flat, it doesn’t set up Q2 very well, which is spring, where you normally make very good money.”
According to Croke, with all the uncertainty, freight volumes are down. There are still too many trucks on the road. Freight rates are about where they were in 2019.
“We are heading to where we were for Q2 in 2019,” Croke said. “If you remember that we had record level bankruptcy’s in Q2 and it was very soft freight recessionary market which was contributed to by tariffs that happened in May 2018. We’ve just experienced a record number of imports in February. A pull forward of imports ahead of tariffs again. We’ve seen this video before. Now I fear we’ve moved a lot of our freight already this year, especially cross border from Canada. We’ve had carriers record some of their biggest February, January freight movements ever in their history.”
No Peak Season
Croke noted that because so much freight has already been moved in 2025, it does not set the year up for having a peak later in in the year. Excess capacity still exists for both spot and contract, while large and small fleets still have too many trucks.
“By our count we’ve got about 8% more trucks still in the market than we had before the pandemic,” Croke said. “Volumes are still about where they were before the pandemic. We’ve still got more trucks than loads and that’s keeping a lid on any upward rate movement that we would normally see coming into spring.”
Tariffs Could Be Devastating
According to Croke, the freight industry should not look for any changes until next year.
“At the start of the the year we were thinking 2025 would be a rebound year; we’d see normally seasonality,” Croke said. “Next thing tariffs come along. Not just 10% tariffs on China like in 2018, but 25% tariffs on our trading partners, assuming that goes ahead. That’s potentially devastating for the cross border freight market. We’re not really sure how this plays out, but I think what it means is any chance of a recovery this year has kind of disappeared. And that’s why most economist are looking at early 2026 as when it’s most likely going to improve again.
Uncertainty – The New Reality
“I think that this paralysis that shippers and supply chains are in is just going translate into fewer loads for out trucks to haul,” Croke said. “That’s the economic reality. It’s he uncertainty that we’re all grappling with and now 2026 becomes a reality, whereas we were thinking late last year, spring this year has to be when the market turns.”
Croke said that beyond monitoring spot and dry van rates, he also looks to intermodal rates as a guide for where the market is headed.
“When truckloads rates improve and the market improves, about one month to six weeks later, intermodal spot rates start to rise,” Croke said. “Intermodal is an outlet for shippers who can’t find trucks. When you see dry van rates go up and intermodal at the same same time, you then know the market has flipped. Right now, they are both going sideways. But, if you go look at our last three or four freight recessions, you see intermodal spot rates and dry van spot rates go up at the same time and down at the same time. Right now, the two aren’t working closely together. So, we’ll know when that happens. But right now, things are just flat. A bit like tonnage. Tonnage is about where 2018, 2019 level were. We’ve still got more trucks on the road and a lot of uncertainty. New orders were down about six points in February. New orders go into manufacturing that goes in the back of out trucks [and new orders] are heading south, not north. That’s where I think we look at a fairly flat freight market this year.”
What Should Carriers Do
Croke’s main direction for carriers is to slow down. Slowing down 10mph is equivalent to an 8 cent per-mile increase.
“I think the name of the game this year is slow down and be very careful about what lanes you run,” Croke said. “Build good partnerships with your brokers and carriers and shippers. Stick with them. Don’t be afraid to try new things, but most of all, because I think diesel is about 1/3 of your costs, I would say slow down. Slowing down is the one thing you can control this year. I just see a lot of carriers running way too fast. And that’s just eating into their profits. They are chasing revenue which defeats the purpose because they’re ending up with less margin even though they should have slowed down and increased their margin. It’s kind of counterintuitive, but that’s what I would say to carriers this years. It’s going to be a real grind.”
Dana Guthrie is an award-winning journalist who has been featured in multiple newspapers, books and magazines across the globe. She is currently based in the Atlanta, Georgia, area.
