The year 2024 will go down as a bit of a mixed bag for transportation. The truckload market remained sluggish, and maritime rates rose due to the ongoing wars in Ukraine and the Middle East. Capacity remained high, while fuel prices came down. Meanwhile shippers loaded up on inventory ahead of anticipated rises in tariffs.
As we begin 2025, we asked three industry experts for their takes on what the new year may bring for transportation and logistics. Participants included: Sal Campos, managed transportation operations leader at logistics service provider Ruan; Allan Miner, CEO of the third-party logistics company CT Logistics; and Julie Van de Kamp, chief customer officer for the freight data and analytics platform Sonar.
The past two years have been sluggish for transportation companies. What do you expect for 2025?
Sal Campos: There have been expectations for a rise in rates for the past two years that haven’t materialized. Capacity in the industry has remained resilient in the face of these low rates, and trucks are leaving the market more slowly than anyone had anticipated. We are reasonably comfortable that rates have hit bottom and will not go any lower, but any rebound may be more gradual than carriers would like.
Julie Van de Kamp: The conditions that have suppressed freight rates have mostly been on the supply or capacity side of the equation—demand, or volume, has been fairly robust throughout the year. We think that this imbalance is coming to an end, as evidenced by Sonar’s truckload tender rejection rates breaching 6% back in November. Shippers who pushed contract rates down aggressively in 2023 and 2024 now face upside risks to their rates and the threat of a routing guide breakdown. Third-party logistics providers may experience a temporary squeeze as spot rates rise against the contract rates they have with their customers, but they will be key in finding capacity for retailers, manufacturers, and suppliers as they get their pricing sorted out.
Allan Miner: There should be an uptick in shipping due to the reductions in interest rates leading to the end of the freight recession in the U.S. The U.S. presidential results are showing positive consumer and corporate attitudes; therefore, spending activity for the U.S. consumer, which drives elevated shipping activities for companies as well.
How will the new administration affect trade and logistics policy?
Julie Van de Kamp: I think the Trump administration’s policies combine for a beneficial effect on transportation companies in North America. The prospect of higher tariffs on goods from China are causing aggressive inventory builds to front-run these deadlines, increasing demand for transportation services. At the same time, lower corporate taxes will spur capital expenditures and investment in production. We think that economic ties with Mexico and Canada will grow tighter as regional trade grows in importance relative to “global” trade.
Allan Miner: The new administration is going to have an initial positive impact on trade, but tariffs on Chinese manufactured products will have a negative impact on international trade and logistics activity for the next several years.
Sal Campos: We expect change. The new administration has made it clear they are planning to increase the tariffs levied on companies importing into the United States. There is a commitment to impose 10%–20% tariffs on imports regardless of the country they come from and 60% or higher on goods originating from China or from Chinese companies manufacturing abroad. At the same time, there is a commitment to reducing the regulatory impact on U.S.-based production, making it much easier for companies to nearshore their production. There are a lot of moving parts here, and the full impact remains to be seen. All that being said, manufacturing drives the transportation sector like nothing else, so even small increases in U.S. manufacturing output could have an outside impact on the supply chain and the transportation economy.
A lot of government funds have been spent on improving infrastructure over the past several years. Has that made a difference in our transportation networks?
Julie Van de Kamp: It has in some places. A lot of government money for infrastructure has gone to things like urban transit projects to reduce car traffic and improve pedestrian safety in cities, but that hasn’t really impacted transportation. On the other hand, dredging projects and new cranes at ports all over the East Coast have significantly increased the throughput of those container terminals. A new international bridge across the Rio Grande at Laredo was finally approved by the Biden administration in October. A new bridge across the Mississippi at Memphis is also in the works. These kinds of projects are necessary but make small, incremental improvements to the overall fluidity of the transportation network—they don’t necessarily have direct effects on capacity, volume, or rates. Instead, there might be small reductions in shipment delays and improved on-time performance; drivers might be able to log more miles per day.
Allan Miner: Unfortunately, due to restrictive labor rules and regulations at all of the major East and West Coast ports, the investment in infrastructure will only have a minimal impact on improving capacity and timeliness in our domestic transportation network.
Sal Campos: There are projects we are seeing firsthand here in Iowa, including the $68.6 million mixmaster interchange reconstruction project that will make a difference to safety and traffic flow here locally. Unfortunately, most of the allocated funds are there to simply catch up on repairs of our current infrastructure that are decades past due. While these are needed repairs and improvements, and they will certainly decrease the chances of catastrophic failures, they do little to impact congestion and traffic flow for our drivers. Only a small percentage of the overall funding will go to road expansion and new highway infrastructures.
Aside from smaller players exiting the market, is there anything that can be done to reduce the current overcapacity?
Sal Campos: As we’ve attended several large transportation conferences recently, I’ve been struck by the continued optimism about a turnaround in the second half of 2025. Many large carriers expressed optimism and said they were well positioned with excess capacity to quickly take advantage of an improving freight market. While that commentary was from a small sample of the overall trucking market, I believe it gives us a window into why this freight recession has hung around for so long. Carriers are really clinging to their assets tightly, so they don’t miss the rebound when it finally comes. The best way to see the market rebound is to see the pie get bigger, so everyone isn’t fighting over the same piece.
Allan Miner: Unfortunately, the macroeconomic impact on the supply chain will continue to impact overcapacity in many shipping lanes and geographic regions.
Julie Van de Kamp: Since deregulation, the freight market naturally corrects itself over time. The latest oversupply was a direct result of an overstimulated economy, and it’s taken longer than typical to correct. One of the great things about the freight market is that it's self-healing, but this also means that it can be volatile and the pendulum swings between over- and under-supply of capacity. All that to say, the current overcapacity will correct within the next few months.
Will lower interest rates help to increase transportation-related investments?
Julie Van de Kamp: Lower interest rates mean that money is cheaper and therefore a wider range of capital projects—some of which may have been on the border of feasibility before—can achieve acceptable rates of return. So, borrowing and investing will be incentivized. Real estate development and construction will be stimulated, as well as homebuying, not to mention other capital expenditures like equipment purchases. For carriers specifically, it will be cheaper to replenish their fleets with new trucks; lease terms will be more favorable. We expect the Fed to keep moving interest rates down as long as inflation stays relatively under control, and it should continue to stimulate borrowing, investment, and economic growth, all of which are positives for transportation demand.
Sal Campos–Ruan: I don’t see that having a major impact for most companies. Transportation companies invest in trucks, trailers, and drivers. Our rolling assets have a finite life cycle, and while we can delay purchases for a while, eventually, you must replenish this rolling stock. It was unfortunate that during COVID—when we all needed assets and interest rates were low—that the manufacturers could not keep up with the demand. Now that interest rates are high, they can build more trucks and trailers than carriers need.
Allan Miner: [Lower interest rates will help] only to the extent that investments in new tractors and trailers will be reduced by three to five years.
Have you introduced artificial intelligence (AI) into any of your operations? In what areas and how has it made an impact?
Allan Miner: Yes, we have begun to use AI in some of our simpler, repetitive tasks that are not too complex.
Sal Campos: As this technology begins to mature, we’ve found two areas show a potential for promising returns. We’ve been using RPA [robotic process automation] for a while in our workflow automations, and AI has allowed us to pick up some nice efficiency gains, especially in the FP&A [financial planning and analysis] areas. On the safety and compliance side, companies have begun to use AI to help parse through enormous amounts of data available to help predict areas of risk so that they can work upstream to prevent them.
Do you expect fuel costs to decline or rise in the coming year, and how will that affect the industry?
Sal Campos: I tell our procurement team all the time that if trucking companies could accurately predict fuel prices, we would sell all of our trucks and just invest in the commodities market. We’d make a lot more money without all the hassle of operating trucks! There are so many factors that drive the supply and demand of diesel that even the most sophisticated experts are often wrong. Our focus is to have fair fuel programs with our suppliers and customers that allow us to hedge against cost changes so that they don’t materially impact us either way. I believe most trucking companies take the same approach.
Julie Van de Kamp: In 2025, fuel prices are expected to decline slightly on a national level. This forecast is supported by OPEC's recent decision to maintain its voluntary production cuts for the remainder of the year, delaying plans of an output hike that would risk further deterioration in oil prices. President-elect Donald Trump campaigned on pro-growth energy policies, including the opening of federal leases for oil and gas, which would add to U.S. production levels that have repeatedly hit record highs over the past 12 months. If the Ukraine situation is resolved quickly, regardless of the specifics, it could lead to the lifting of sanctions on Russian oil, further adding to global supply.
Allan Miner: Fuel costs will be declining as the new federal government reinstitutes domestic oil production incentives and capabilities in North America.
What do you think is the future of electric-powered vehicles (EVs), and has your opinion shifted with current conditions?
Sal Campos: We have adopted electric trucks on a very limited scale and only where it is economically viable for both Ruan and our customers. We believe the yard tractor is the right application to continue electrification/decarbonization efforts. It is a creative, reliable, sustainable transportation solution that improves driver satisfaction and can be lower cost versus diesel deployment. I believe we are not even remotely close to having the technology or infrastructure for wider adoption, especially in heavy-duty Class 8 applications. We would probably need to increase our truck and driver fleets by 50% to accommodate the lowered payload (EVs are much heavier) and long charging times (it only takes 15 minutes to fuel a diesel). Those extra costs would ultimately be passed on to the consumer. We are currently piloting/testing other solutions, including renewable diesel, renewable natural gas, hydrogen fuel cell, etc.
Julie Van de Kamp: Electric-powered vehicles have a bright future, and there are certainly use cases in commercial transportation where they would be a good fit. The very best use cases for electric commercial vehicles are in local delivery—returning to the same motor pool each night simplifies battery recharging. The frequent stopping and starting in urban traffic, which is extremely fuel-inefficient and causes higher emissions, are easily handled by electric vehicles. Over-the-road trucking is a different story: The miles are long, often into unfamiliar regions; the routes are irregular and change frequently; and maximizing shipment weight and range really matter. There are a lot of reasons why long-haul truckers want the range and flexibility from internal combustion engines, so we expect that segment to convert to EVs last, if at all.
How can distributors and shippers better prepare their shipments to help carriers?
Julie Van de Kamp: Distributors and shippers can better help their carriers by making their freight and processes as efficient and driver-friendly as possible. Through conversations with shippers and my experience in working for a carrier, a broker, and now a data company, I’ve learned the following: Aligned strategies and relationships that allow for long-term partnerships and open communication and mutual reliance on more than just transactional freight are the most beneficial [tactics].
Allan Miner: Plan to use standard pallet dimensions, weights, and classifications, so that ease of shipping, transfer, storage, and delivery are harmonious.
Sal Campos: The two most important factors are to provide ample advance notice of pickup and delivery dates/times and to be ready for the pickup and/or the delivery when the driver arrives. Drivers are planned days in advance, so a delay of even a few hours can cause a carrier to rework planning across multiple drivers and trips to account for the cascading effect of the delay.
New Jersey is home to the most congested freight bottleneck in the country for the seventh straight year, according to research from the American Transportation Research Institute (ATRI), released today.
ATRI’s annual list of the Top 100 Truck Bottlenecks aims to highlight the nation’s most congested highways and help local, state, and federal governments target funding to areas most in need of relief. The data show ways to reduce chokepoints, lower emissions, and drive economic growth, according to the researchers.
The 2025 Top Truck Bottleneck List measures the level of truck-involved congestion at more than 325 locations on the national highway system. The analysis is based on an extensive database of freight truck GPS data and uses several customized software applications and analysis methods, along with terabytes of data from trucking operations, to produce a congestion impact ranking for each location. The bottleneck locations detailed in the latest ATRI list represent the top 100 congested locations, although ATRI continuously monitors more than 325 freight-critical locations, the group said.
For the seventh straight year, the intersection of I-95 and State Route 4 near the George Washington Bridge in Fort Lee, New Jersey, is the top freight bottleneck in the country. The remaining top 10 bottlenecks include: Chicago, I-294 at I-290/I-88; Houston, I-45 at I-69/US 59; Atlanta, I-285 at I-85 (North); Nashville: I-24/I-40 at I-440 (East); Atlanta: I-75 at I-285 (North); Los Angeles, SR 60 at SR 57; Cincinnati, I-71 at I-75; Houston, I-10 at I-45; and Atlanta, I-20 at I-285 (West).
ATRI’s analysis, which utilized data from 2024, found that traffic conditions continue to deteriorate from recent years, partly due to work zones resulting from increased infrastructure investment. Average rush hour truck speeds were 34.2 miles per hour (MPH), down 3% from the previous year. Among the top 10 locations, average rush hour truck speeds were 29.7 MPH.
In addition to squandering time and money, these delays also waste fuel—with trucks burning an estimated 6.4 billion gallons of diesel fuel and producing more than 65 million metric tons of additional carbon emissions while stuck in traffic jams, according to ATRI.
On a positive note, ATRI said its analysis helps quantify the value of infrastructure investment, pointing to improvements at Chicago’s Jane Byrne Interchange as an example. Once the number one truck bottleneck in the country for three years in a row, the recently constructed interchange saw rush hour truck speeds improve by nearly 25% after construction was completed, according to the report.
“Delays inflicted on truckers by congestion are the equivalent of 436,000 drivers sitting idle for an entire year,” ATRI President and COO Rebecca Brewster said in a statement announcing the findings. “These metrics are getting worse, but the good news is that states do not need to accept the status quo. Illinois was once home to the top bottleneck in the country, but following a sustained effort to expand capacity, the Jane Byrne Interchange in Chicago no longer ranks in the top 10. This data gives policymakers a road map to reduce chokepoints, lower emissions, and drive economic growth.”
It’s getting a little easier to find warehouse space in the U.S., as the frantic construction pace of recent years declined to pre-pandemic levels in the fourth quarter of 2024, in line with rising vacancies, according to a report from real estate firm Colliers.
Those trends played out as the gap between new building supply and tenants’ demand narrowed during 2024, the firm said in its “U.S. Industrial Market Outlook Report / Q4 2024.” By the numbers, developers delivered 400 million square feet for the year, 34% below the record 607 million square feet completed in 2023. And net absorption, a key measure of demand, declined by 27%, to 168 million square feet.
Consequently, the U.S. industrial vacancy rate rose by 126 basis points, to 6.8%, as construction activity normalized at year-end to pre-pandemic levels of below 300 million square feet. With supply and demand nearing equilibrium in 2025, the vacancy rate is expected to peak at around 7% before starting to fall again.
Thanks to those market conditions, renters of warehouse space should begin to see some relief from the steep rent hikes they’re seen in recent years. According to Colliers, rent growth decelerated in 2024 after nine consecutive quarters of year-over-year increases surpassing 10%. Average warehouse and distribution rents rose by 5% to $10.12/SF triple net, and rents in some markets actually declined following a period of unprecedented growth when increases often exceeded 25% year-over-year. As the market adjusts, rents are projected to stabilize in 2025, rising between 2% and 5%, in line with historical averages.
In 2024, there were 125 new occupancies of 500,000 square feet or more, led by third-party logistics (3PL) providers, followed by manufacturing companies. Demand peaked in the fourth quarter at 53 million square feet, while the first quarter had the lowest activity at 28 million square feet — the lowest quarterly tally since 2012.
In its economic outlook for the future, Colliers said the U.S. economy remains strong by most measures; with low unemployment, consumer spending surpassing expectations, positive GDP growth, and signs of improvement in manufacturing. However businesses still face challenges including persistent inflation, the lowest hiring rate since 2010, and uncertainties surrounding tariffs, migration, and policies introduced by the new Trump Administration.
Both shippers and carriers feel growing urgency for the logistics industry to agree on a common standard for key performance indicators (KPIs), as the sector’s benchmarks have continued to evolve since the COVID-19 pandemic, according to research from freight brokerage RXO.
The feeling is nearly universal, with 87% of shippers and 90% of carriers agreeing that there should be set KPI industry standards, up from 78% and 74% respectively in 2022, according to results from “The Logistics Professional’s Guide to KPIs,” an RXO research study conducted in collaboration with third-party research firm Qualtrics.
"Managing supply chain data is incredibly important, but it’s not easy. What technology to use, which metrics to track, where to set benchmarks, how to leverage data to drive action – modern logistics professionals grapple with all these challenges,” Ben Steffes, VP of Solutions & Strategy at RXO, said in a release.
Additional results from the survey showed that shippers are more data-driven than they were in the past; 86% of shippers reference their logistics KPIs at least weekly (up from 79% in 2022), and 45% of shippers reference them daily (up from 32% in 2022).
Despite that sharpened focus, performance benchmarks have become slightly more lenient, the survey showed. Industry performance standards for core transportation KPIs—such as on-time performance, payables, and tender acceptance—are generally consistent with 2022, but the underlying data shows a tendency to be a bit more forgiving, RXO said.
One solution is to be a shipper-of-choice for your chosen carriers. That strategy can enable better rates and more capacity, as RXO found 95% of carriers said inefficient shipping practices impact the rates they give to shippers, and 99% of carriers take a shipper’s KPI expectations into account before agreeing to move a shipment.
“KPIs are essential for effective supply chain management and continuous improvement, and they’re always evolving,” Steffes said. “Shifts in consumer demand and an influx of technology are driving this change, in combination with the dynamic and fragmented nature of the freight market. To optimize performance, businesses need consistent measurement and reporting. We released this study to help shippers and carriers benchmark their standards against how their peers approach KPIs today.”
As U.S. businesses count down the days until the expiration of the Trump Administration’s monthlong pause of tariffs on Canada and Mexico, a report from Uber Freight says the tariffs will likely be avoided through an extended agreement, since the potential for damaging consequences would be so severe for all parties.
If the tariffs occurred, they could push U.S. inflation higher, adding $1,000 to $1,200 to the average person's cost of living. And relief from interest rates would likely not come to the rescue, since inflation is already above the Fed's target, delaying further rate cuts.
A potential impact of the tariffs in the long run might be to boost domestic freight by giving local manufacturers an edge. However, the magnitude and sudden implementation of these tariffs means we likely won't see such benefits for a while, and the immediate damage will be more significant in the meantime, Uber Freight said in its “2025 Q1 Market update & outlook.”
That market volatility comes even as tough times continue in the freight market. In the U.S. full truckload sector, the cost per loaded mile currently exceeds spot rates significantly, which will likely push rate increases.
However, in the first quarter of 2025, spot rates are now falling, as they usually do in February following the winter peak. According to Uber Freight, this situation arose after truck operating costs rose 2 cents/mile in 2023 despite a 9-cent diesel price decline, thanks to increases in insurance (+13%), truck and trailer costs (+9%), and driver wages (+8%). Costs then fell 2 cents/mile in 2024, resulting in stable costs over the past two years.
Fortunately, Uber Freight predicts that the freight cycle could soon begin to turn, as signs of a recovery are emerging despite weak current demand. A measure of manufacturing growth called the ISM PMI edged up to 50.9 in December, surpassing the expansion threshold for the first time in 26 months.
Accordingly, new orders and production increased while employment stabilized. That means the U.S. manufacturing economy appears to be expanding after a prolonged period of contraction, signaling a positive outlook for freight demand, Uber Freight said.
The surge comes as the U.S. imposed a new 10% tariff on Chinese goods as of February 4, while pausing a more aggressive 25% tariffs on imports from Mexico and Canada until March, Descartes said in its “February Global Shipping Report.”
So far, ports are handling the surge well, with overall port transit time delays not significantly lengthening at the top 10 U.S. ports, despite elevated volumes for a seventh consecutive month. But the future may look more cloudy; businesses with global supply chains are coping with heightened uncertainty as they eye the new U.S. tariffs on China, continuing trade policy tensions, and ongoing geopolitical instability in the Middle East, Descartes said.
“The impact of new and potential tariffs, coupled with a late Chinese Lunar New Year (January 29 – February 12), may have contributed to higher U.S. container imports in January,” Jackson Wood, Director, Industry Strategy at Descartes, said in a release. “These trade policy developments add significant uncertainty to global supply chains, increasing concerns about rising import costs and supply chain disruptions. As trade tensions escalate, businesses and consumers alike may face the risk of higher prices and prolonged market volatility.”