Insight June 2025

D E C E M B E R 2 02 4

S P E C I A L

F E A T U R E

Transportation Market Overview

TRUCKLOAD

INTERMODAL

LTL

PARCEL

INTERNATIONAL

©2025 MODE Global, LLC MODE Public

TRUCKLOAD Truckload Market Update The Outbound Tender Rejections Index (OTRI) experienced a modest seasonal lift in May, driven by International Roadcheck Week and Memorial Day-related disruptions. As in previous years, rising rejection rates have translated into upward pressure on spot market pricing.

Source: sonar.surf

DAT’s National Van Spot Linehaul RPM increased 2% year-over-year in May, though lower diesel prices continued to compress overall carrier revenue. As a result, all-in RPM declined 1.5% year-over-year, the second consecutive month showing that level of decline. Historically, rates tend to strengthen from May through July, and current projections suggest this seasonal pattern will hold, with all-in RPM expected to mirror last year’s trajectory.

June 2025 MODE Insight

TRUCKLOAD UPDATE FTR Intelligence continues to forecast a stable market environment for 2025, though recent projections show more caution.

Linehaul rate growth is still anticipated but at a slower pace than previously expected. With fuel surcharges trending downward, any gains in base rates may be neutralized, keeping all-in RPM levels flat or slightly below prior year Source: ftrintel.com comparisons.

National Spot Rates Spot activity slows at month’s close

$2.27

MAR

$1.98

$1.96

$1.99

$2.02

MAR

APR

MAY

JUN EST.

DRY VAN Source: DAT.com/trendlines

June 2025 MODE Insight

$2.53

$2.57

$2.57 $2.58

MAR

APR

MAY

$2.28

APR

$2.36

$2.33

MAY

JUN EST.

JUN EST.

FLATBED

REEFER

INTERMODAL Intermodal Market Update Domestic Intermodal contract rates have been seeing increases averaging in the 2-5% range. Contract rates are still higher than spot rates due to ample spot truck capacity, which leads to inexpensive truck rates. Capacity for dray, equipment and gate reservations are abundant in all metro areas.

Peak season traditionally begins in August or September for California-originated shipments and when peak season is officially declared, capacity will potentially become more challenging. The MODE Global Intermodal team will monitor closely and keep all parties informed as news arises.

June 2025 MODE Insight

LTL LTL Industry News Here are links to some top stories in the industry for you to check out:

U.S. LTL pricing maintains record high as truckload slumps

LTL Carrier Averitt partners with Best Overnite Express for service in the West

XPO sees modest tonnage decline in May

UPS seeks reentry into LTL space as LTL costs climb higher

LTL Market Update As we enter June, the LTL industry is demonstrating a nuanced balance of resilience and strategic evolution amid a fluctuating economic landscape. Building on recent trends from April and May, carriers are actively adjusting to increased freight volumes driven by robust e-commerce activity and ongoing industrial sector recovery. The industry continues to see consolidation with notable mergers and acquisitions, as companies like Estes and R&L expand their networks to capitalize on growing demand segments.

In May, the anticipated overhaul of the NMFTA classification system took a step forward, prompting shippers and carriers alike to re-evaluate their pricing strategies and service models. This ongoing regulatory consideration is encouraging a more segmented approach to pricing, potentially leading to more customized service offerings tailored to specific market needs.

Demand remains solid, with freight volumes trending upward due to sustained e-commerce growth and resumed manufacturing output after seasonal lull periods. Carriers are investing in technological upgrades such as automated freight management and route optimization tools to enhance operational efficiency, reduce costs and improve sustainability practices—a trend that will gain momentum in June.

Despite economic uncertainties, including inflationary pressures and labor market tightness, the overall industry sentiment remains optimistic. Industry players are prioritizing flexibility and innovation to meet evolving customer expectations while navigating market challenges. Expect continued growth in niche markets and an emphasis on integrating eco-friendly initiatives into mainstream operations, positioning the industry for a balanced long-term outlook.

June 2025 MODE Insight

LTL UPDATE Weak U.S. Industrial Activity Casts Cold Light on LTL Demand Outlook Soft demand for less-than-truckload (LTL) freight and service in the U.S. appears poised to get even softer, as publicly owned LTL providers prepare to release mid-quarter market reports. Shippers should expect volumes to vary across carriers, but pricing is likely to stay at its current elevated levels, with the U.S. long-distance LTL producer price index (PPI) at 259 for the past three months, a record high and about 5% higher than a year ago.

Shipments and tonnage both decreased year over year in May at Old Dominion Freight Line (ODFL), the secondlargest U.S. LTL trucking company, as per ODFL on Wednesday. ODFL reported an 8.4% decrease in LTL tonnage and a 6.8% drop in LTL shipments per day. Revenue fell 5.8% year-over-year in May, but LTL revenue per hundredweight, excluding fuel surcharges, rose 5.6%. ODFL remains one of the most disciplined LTL carriers when it comes to pricing, and its operating ratio — a measure of profitability — is in the 70s.

A drop in LTL revenue, or shipments, may not point to a broader market slump, but may reflect a carrier’s refusal to lower rates to get freight at the expense of profitability. Last year, the aggregate LTL shipment count among the Top 25 LTL Carriers rose 2.5%.

The drop in demand ODFL saw in May comes as U.S. manufacturers cope with high input inventories and fluctuations in orders as vendors frontload freight to avoid high U.S. tariffs. Industrial manufacturing makes up the bulk of LTL freight in the U.S. For further details, you can refer to this JOC article.

June 2025 MODE Insight

LTL UPDATE United States ISM Manufacturing PMI The ISM Manufacturing PMI in the U.S. fell to 48.5 in May 2025 from 48.7 in April, below market expectations of 49.5. The reading marked the third consecutive month of contraction in the manufacturing sector and the sharpest decline since November 2024, highlighting mounting economic uncertainty and sustained cost pressures, partly driven by volatile trade policies under the Trump administration. Output, new orders, employment and backlog of orders all declined but at a slower pace, while new export sales dropped more sharply. Meanwhile, the Inventories Index slipped into contraction territory after expanding previously due to pull-forward buying ahead of tariffs. The Supplier Deliveries Index signaled ongoing delays, reflecting persistent bottlenecks at ports of entry. Although tariff-driven price growth eased slightly, it remained elevated overall.

Source: Trading Economics & Federal Reserve

Fuel The U.S. national average cost per gallon for on-highway diesel in the month of May 2025 came in at $3.50, which is $.079 or 1.9% lower than April 2025's average of $3.579. The U.S. national average in May of 2024 was $3.82, which is $.32 or ~9% more than May 2025. As we enter June 2025, the U.S. national average stands at $3.451 per gallon.

June 2025 MODE Insight

PARCEL U.S. Small Parcel Market Update Shifts in Fulfillment & Carrier Ownership Major e-commerce players (Amazon, Walmart, Target, etc.) are investing heavily in in‑house delivery networks, handling a growing share of parcel shipments. This trend intensifies competition, prompting 3PLs and regional carriers to consolidate and innovate.

Innovation in Delivery Modes Drone delivery is scaling: Walmart and Alphabet’s Wing now serve hundreds of stores (DFW plus 100 more planned), with 30-minute drone drops and Walmart+ members get waived fees.

Autonomous trucks/drones are being tested by UPS, Zipline and Amazon. Regulatory approvals (FAA BVLOS) are advancing, though full‑scale deployment remains years off.

Enhanced tracking tech (Bluetooth, RFID, GPS, cellular) is emerging—moving from barcode to “sensing” networks improves real-time visibility, especially for high‑value or sensitive (e.g. pharma) parcels.

Cross‑Border & Regulated Shipping New U.S. rules ending the $800 de minimis exemption have forced carriers (like DHL) to suspend high-value overseas parcel service, creating delays and compliance burdens.

In response, brokers and shippers are automating customs, investing in compliance tools and exploring consolidated shipping solutions.

Strategic Shipper Responses Amid rising costs, shippers are making smarter moves such as in-depth auditing of their carrier contracts, optimizing packaging sizes, consolidating shipments and adopting multi-carrier strategies and micro‑fulfillment setups.

Tech adoption (e.g. logistic intelligence platforms, real-time tracking) and partnerships (gig‑economy, locker networks, drones) have become key to maintaining service quality without breaking budgets.

June 2025 MODE Insight

INTERNATIONAL Key Trends Rates: Asia to U.S. rates increasing at a faster pace than the COVID era surge. “Premium” rate levels have returned as shippers scramble to move orders.

Supply: Extra loaders and new carrier entrants to flood market with additional capacity.

Demand: Volume surge pivots from back-orders to front-loading considering tariff uncertainty.

Tariff Update: U.S.-China tariffs put on 90-day pause on May 14. Trump Administration implements tariff increase on Steel/Aluminum imports effective June 4.

Rates Container rates in the Asia-U.S. trade are surging once again due to the pause in the China-U.S. tariff war as carriers press for higher rates while shippers quickly move to push more volume. The spot rate market is rising at a faster pace than the COVID era boom in 2021 attributed to a spike in Asia imports driven by the temporary pause in tariff increases imposed by the Trump administration.

June 2025 MODE Insight

INTERNATIONAL UPDATE Rates from Asia to the U.S. West Coast jumped by 54% in May as the recent China volume surge begins to shift from clearing out delayed orders to shipment front-loading, advancing peak season type conditions that are expected to continue through June.

Asia-U.S. East Coast base port rates spiked 38% in mid-May as the market was caught off-guard by the sudden and tentative tariff-war ceasefire between China and the United States. Platts' data shows the West Coast spot rate has increased about 173% since early April, and the East Coast rate doubled over that same time.

Carriers were able to push significant spot rate increases on trade lanes from China to the U.S. on June 1. We are now also seeing shippers once again being offered “Premium” or “Diamond Tier” services at levels much higher than spot rates to guarantee bookings and space on ships. This is something the industry has not seen since the height of chaos during the COVID era.

These sharp increases are expected throughout June based on the concept that importers will continue to try to move orders prior to the potential of increased tariffs once the current pause is lifted or some type of agreement between the U.S. and China is formalized. Many industry analysts feel that as capacity increases in the TransPacific route, the sharp increase in shipments is expected to plateau as supply chains gradually recover and inventories grow. With this plateau, pricing will likely diminish, “normalizing” the supply/demand influence after this initial burst of imports.

June 2025 MODE Insight

INTERNATIONAL UPDATE Capacity/Supply With the announced pause in the U.S.-China tariff war and sharp increases in volumes, carriers have already started finding new capacity and introducing it into the Trans-Pacific trade lane.

Smaller, niche carriers like China United Lines (CU Lines) and others are making a return to the Trans-Pacific.

Additionally, existing carriers are planning the restoration of suspended services and introducing more “extra loaders” in June. Some carriers will be operating multiple extra loaders throughout the month in addition to their regular service programs.

The new capacity is especially significant on the trade lanes from Asia to the West Coast. Carriers in June have increased capacity by 12.8% and plan another 16.5% increase in July. In total, this could amount to an increase of about 397,000 TEUs of capacity in June/July compared to the situation just three weeks ago at the end of May. May blank sailings reached nearly 700,000 TEU, or 27% of market capacity, while volumes grew monthover-month by nearly 26%. Although carriers deployed some extra loaders at the end of May, cargo backlogs grew to a point where space remained inadequate despite the added tonnage. As a result, vessel space became extremely tight, and thus spot/FAK rates increased substantially on June 1.

Blank sailings will likely be offset by the introduction of planned extra loaders, some restored services and new carriers entering the trade moving into June.

Source: M+R Spedag Group

June 2025 MODE Insight

INTERNATIONAL UPDATE Capacity/Supply Continued June is expected to see the most container ship capacity in the Trans-Pacific trade since November 2024.

Overall container capacity is expected to reach 1.268 million TEUs between Asia and the U.S. West Coast by end of June, which is an increase of 34,000 TEUs from the end of May.

Operational News Tariff Update: On May 14, the United States and China agreed to a 90-day pause on most tariffs for imported goods, with an end date of August 12. This pause lowers the tariff on Chinese imports to 30%. During this period, Chinese imports will be subject to a 10% baseline tariff plus an additional 20%.

Tariffs on imports of steel and aluminum to the U.S. doubled to 50% starting at 12:01 a.m. Wednesday, June 4, after President Trump followed through on his plan to increase those duties. The intention of the 50% tariff is to effectively counter foreign countries that continue to offload low-priced, excess steel and aluminum in the United States market, which undercuts the competitiveness of U.S. steel and aluminum industries. It is reported that in 2024, the U.S. imported $31.3 billion worth of iron and steel and $27.4 billion of aluminum, according to the Commerce Department.

The 50% tariffs on steel and aluminum apply to all countries, except the United Kingdom, which announced a preliminary trade deal with the Trump administration in May. The rate for steel and aluminum imports from the U.K. remains at 25% until at least July 9.

June 2025 MODE Insight

INTERNATIONAL UPDATE Volume/Demand Final volume reports for the end of May showed U.S. container import volumes declined 2,177,453 TEUs, or about 9.7% compared to April.

This drop in May volumes likely reflects the pull back in orders as businesses reviewed both inventory and sourcing strategies due to the tariff increases prior to the May 14 announced pause. However, moving into June, orders seem to be picking up again as importers see this window of opportunity to bring in goods at lower tariff rates.

According to data from the Ports of Los Angeles and Long Beach, they are projecting a huge volume of imports over the next few weeks. Port Los Angeles, which will handle about 92,000 TEUs imports in the first week of June, is forecasting more than 103,000 TEUs and 112,000 TEUs in the second and third weeks of June. Port of Long Beach is projecting imports of more than 90,000 TEUs per week during the last three weeks of June.

This surge can be attributed to the new deadline for a trade agreement, set for August 14, and the potential for increased tariffs if negotiations falter. The anticipation of heightened tariffs has led to a rush among shippers to import goods before the deadline, consequently driving order volumes up sharply for June and July.

Trade analysts feel that this year’s peak shipping season will start earlier and be much shorter than typical peak seasons, which run from August through October. This is being driven by the tariff pause and current August deadline. Peak season has essentially already started, and peak of the peak may end up being in the second half of June or early July. If no trade/tariff agreement is reached prior to the August 14 deadline, volumes would most likely drop sharply in August or September.

June 2025 MODE Insight

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