Shifting Tariffs: Navigating Market Uncertainty in the Trucking Industry

The trucking sector is navigating a challenging financial landscape due to unpredictable market dynamics driven by ongoing tariffs and global trade tensions. Experts are weighing in on the situation.

A recent report from DAT Freight & Analytics highlights that even though long-term contracts might experience modest growth this year, the spot market is highly likely to face significant volatility as it responds to tariff changes.

“Predicting the spot market is tricky since it’s heavily influenced by broader trade conditions as we approach fall,” remarked Ken Adamo, DAT’s chief analytics officer.”We could encounter an active tropical season this summer which might boost demand. additionally, back-to-school shipping typically ramps up during this time.”

Adamo also pointed out another hurdle—the surplus of trucks and carriers in the industry. This oversupply means any potential recovery in freight demand isn’t likely driven by supply factors alone; rather, there needs to be a strong catalyst for increased demand.

“The unpredictability surrounding tariffs keeps everyone on edge,” noted Jenna Slagle from Project44.

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“Tariff statuses can shift daily and directly affect demand,” she explained. “Rising tariffs can lead to lower volumes and excess capacity in both truckload and LTL markets—resulting in reduced prices.Conversely, if tariffs are lifted or paused, we could see surges in demand that tighten capacity.” These fluctuations will undoubtedly reflect on the spot market.

The overarching uncertainty stemming from tariff policies remains a key factor influencing the market dynamics today—alongside economic conditions and labor force challenges.

“Supply chain disruptions due to tariff uncertainties will cause rapid shifts between contract and spot rates,” said Noël Perry of Truckstop. “Initially we may see more reliance on contract rates due to decreased shipments from China.” He anticipates that once stability returns wiht rising demands tightening capacity again,we’ll witness another shift back towards spot rates.

Perry’s analysis indicates contract volume currently exceeds trends by about 4%, while spot volume lags behind at roughly -1%. He believes supply disruptions will heighten interest for available spots but warns that economic health remains an unpredictable variable affecting these trends.

“Higher tariffs have been detrimental for manufacturing sectors which ultimately impacts truck freight alongside imported goods,” stated Bob Costello from ATA (American Trucking Associations).

RELATED: Manufacturing Activity Declines for Third Consecutive Month

“Forecasting becomes nearly unachievable when so much hinges on fluctuating tariffs,” Costello added. “Nearly half of U.S imports consist of manufacturing inputs; thus higher taxes hurt production levels.”

This increase in costs frequently enough leads directly into price hikes—a scenario unfavorable for trucking as elevated prices usually suppress freight demands.
However trucking organizations are actively seeking ways around these inconsistencies within their markets.”

Citing Uber Freight’s estimates—a mere one percent rise in tariff rates could diminish truckload requests by up-to .25%. This limitation further complicates any potential recovery trajectory within freight markets.”

“On request-for-proposal fronts regarding contract rates have remained stagnant over three months now,” shared Mazen Danaf at Uber freight adding “Most shippers prefer sticking with existing partners whenever feasible.” Simultaneously occurring late May through early June saw some seasonal rebounds among spot rate figures before typical post-holiday softening occurs.”