Industry Market Trends

GENERAL MARKET TRENDS

Fuel Index:

Diesel National Averages:
- This Week: $3.758 gallon
- Last Week: $3.739/gallon
- Weekly Change: $0.19
- Year-over-Year Change: $0.068

Summary:

U.S. diesel prices edged slightly higher as Middle East tensions disrupted shipping lanes in the Persian Gulf. West Coast prices saw the sharpest uptick (+0.9%), while Midwest and Gulf Coast remained stable. Canadian diesel holds near ~$4.01/gal USD (↓12.6% YoY). Mexican diesel climbed to ~$5.07/gal USD (↑5.0% YoY) as refinery bottlenecks and subsidy reductions continue to influence pricing.

Outlook: Elevated geopolitical risk may pressure global fuel markets through Q3. Watch for potential surcharges on long-haul lanes as volatility lingers.

Reference: Gasoline and Diesel Fuel Update – U.S. Energy Information Administration (EIA)

RPM Monthly Movers:

National RPM Month-to-Month Changes:
- Dry Van Markets (June – July) $0.07
- Reefer Markets (June – July) $0.08
- Flatbed Markets (June – July) $0.03

POTENTIAL MARKET DISRUPTORS

Seasonal Trends:

As we are making our way through July, the freight market is navigating heightened regional volatility driven by overlapping seasonal factors:

Peak produce season in key agricultural regions
Summer construction projects across the Southeast and Gulf
Port realignment flows due to trade shifts and tariff impacts

While national capacity is gradually rebalancing post-June, select lanes remain under intense pressure. Reefers and flatbeds continue leading modal tightness, while dry van markets show mixed signals tied to port activity and regional retail demand.

Reefer: Late-season produce volumes remain elevated, driven by strong movement of berries, stone fruit, and citrus; this surge is straining reefer capacity, with LTR up ~46% MoM as trucks concentrate in key corridors (Nogales, McAllen, Lakeland), resulting in extended lead times and elevated spot premiums.
Flatbed: Energy, housing, and industrial freight continue to dominate demand. While LTR declined ~9% MoM from June’s peak, it remains historically high; heavy steel and project freight in Texas and the Gulf are sustaining regional pressure, and Southeast lanes remain congested with construction materials such as pipe, lumber, and roofing.
Dry Van: Port-driven shifts are reshaping inland freight patterns, rebalancing capacity across regions. LTR fell ~5% MoM but remains tight near Gulf and East Coast ports (Houston, Savannah, Norfolk) due to rerouted Asian imports and tariff-driven shifts, while capacity in the Midwest stays loose amid elevated warehouse inventories and continued demand softness.

Other Disruptors:

Steel & Aluminum Tariffs Expanded:
On June 4, 2025, the Trump administration doubled Section 232 tariffs on steel and aluminum imports from 25% to 50%. The expanded measures also target derivative goods, including EV components, solar panels, and select construction inputs from China and Southeast Asia (Vietnam, Thailand, Malaysia). This escalation is already impacting Midwest flatbed lanes, especially corridors through Ohio, Pennsylvania, and Illinois, where inbound industrial freight and construction materials are driving spot rate increases and tightening capacity.
U.S.–China Tariff Pause ENDS:
The U.S.–China tariff truce, initially established on May 12, 2025, is scheduled to expire on August 12. However, phased reinstatements began affecting markets as early as late June, particularly targeting strategic imports. As a result, tariffs on electric vehicles, electronics, and solar panels have returned to elevated levels, ranging from 30% to 50%. These measures fall under renewed enforcement of Section 301 and Section 232 authorities. In response, shippers are increasingly rerouting freight through Mexico and Canada to sidestep direct U.S. import duties. This shift is fueling cross-border demand, especially for dry van and LTL capacity, as companies leverage USMCA provisions and in-bond strategies to mitigate cost exposure.
Cross-Border Freight Conditions:
Cross-border freight conditions are under strain as increased enforcement efforts and shifting trade patterns reshape traffic at U.S.–Mexico ports of entry. While overall volumes remain steady, the dynamics between truckload and LTL activity are evolving due to ongoing nearshoring and tariff-related rerouting.
- Border congestion continues to intensify, with commercial wait times at key crossings (Laredo, Nogales, El Paso) averaging 4–6 hours, driven by heightened customs scrutiny and trade compliance inspections.
- LTL and reefer lanes remain active, supported by strong demand for compliance-sensitive freight like auto parts, dairy, and produce; this is helping offset outbound truckload softness, buoyed further by rising cross-border e-commerce and aftermarket part shipments.
Port Diversions & Inland Shift:
West Coast ports (LA, Long Beach, Oakland): Volumes remain ~10% below YoY averages due to tariff-related shifts, blank sailings, and weaker China-origin bookings.
Gulf & East Coast ports (Houston, Savannah, Charleston): Continue absorbing diverted freight, driving heavier inland flows into Dallas, Atlanta, and Chicago.
These modal shifts are creating tight regional capacity near transload zones and inconsistent spot pricing.
Middle East Tensions Escalate
Drone strikes and naval skirmishes in the Red Sea and Persian Gulf in early July have elevated U.S. naval alert levels to DEFCON 3. A near-collision between an Iranian patrol vessel and a U.S.-flagged tanker further intensified risks.
Diesel futures rose to $2.37/gal as oil supply concerns and shipping reroutes through the Cape of Good Hope add transit days. Freight flows through Middle East-connected trade lanes remain at risk of disruption.

MARKET PREDICTIONS & RATE TRENDS

Capacity & Rate Trends:

Dry Van:

Capacity: Tightening near Gulf and East Coast ports as import flows shift inland. LTR declined ~5% MoM from June peaks but remains healthy.
Rates: Overall flat. Up $0.07 MoM (+3.5%), holding at ~$2.07/mi, still the lowest among equipment types.
Forecast: Expect modest firmness in port-driven lanes through Q3 while oversupplied regions remain stable.

Reefer:

Capacity: Tight nationwide as peak produce flows persist.
Rates: Up $0.08 MoM (+3.4%), now averaging ~$2.45/mi. Capacity constraints continue to support rates.
Forecast: Seasonal pressure should ease post-July as harvest peaks wind down, though cross-border lanes will stay active.

Flatbed:

Capacity: Eased slightly from June peaks but remains historically tight.
Rates: Down $0.03 MoM (–1.1%), holding firm at ~$2.54–$2.59/mi, still the highest of all equipment types.
Forecast: Energy, infrastructure, and tariff-driven steel demand to maintain pressure on key regions, particularly Southeast and Midwest corridors.

Overall Capacity Rebalancing & Forecast:

Dry Van: Generally balanced nationwide, but tightening is evident in Gulf and East Coast corridors as rerouted imports drive inland distribution. Outlook: Retail restocking and e-commerce activity are supporting firmer demand near port hubs. Midwest remains softer due to lingering warehouse overstock.
Reefer: Capacity: Among the tightest segments, fueled by late-season produce volumes from the Pacific Northwest (berries), California (stone fruit), and Florida (citrus). Outlook: Conditions should ease slightly post-July as seasonal harvests taper, but cross-border produce flows will keep Nogales and McAllen lanes active.
Flatbed: Capacity: Softened slightly from June’s highs but remains historically elevated. Hot Regions: Texas, Gulf Coast, and Southeast are leading activity, driven by energy, housing, and steel-related freight. Outlook: Tariff-related volatility in steel shipments could amplify spot rate swings in Midwest industrial lanes.
Cross border freight: Mexico: Persistent 4–6 hour border delays tied to heightened customs enforcement. Canada: Alberta’s pipeline progress is boosting outbound volumes into U.S. manufacturing regions. Outlook: Nearshoring continues to drive strong dry van and LTL demand. Live quoting remains critical on high-compliance freight.
LTL: Stable and resilient. Growth is sustained by aftermarket parts, compliance-sensitive shipments, and nearshoring-driven cross-border flows. Hot Spots: Border regions like Laredo, Detroit, and Nogales continue to see high volumes.

Key Takeaways:

Dry Van Demand: Firming near Gulf/East Coast ports; Midwest still soft.
Reefer Demand: Tight but set to moderate post-July.
Flatbed Demand: Strong—energy and infrastructure freight leading; Midwest lanes watching steel tariff impact
Tariff Impacts: 50% steel and aluminum tariffs are already driving Midwest spot rate volatility.

Port Adjustments & Supply Chain Rebalancing:

West Coast:
- LA/Long Beach: Operating ~10–15% below YoY averages, pressured by weaker transpacific volumes, persistent blank sailings, and importers increasingly favoring Gulf and East Coast gateways to avoid tariff exposure.
- Seattle/Tacoma: Volumes remain flat with no meaningful rebound. Northwest rail intermodal is still underutilized due to limited diversification of import origins.
- Outlook: Without a significant tariff rollback or renewed China import activity, West Coast volumes are likely to stay muted. Expect continued modal leakage to Gulf and East Coast ports through Q3.
East Coast:
- Savannah & Charleston: Gaining market share aggressively as shippers redirect freight from West Coast and NY/NJ. Lower congestion, faster inland access, and improved customs efficiency make them attractive alternatives.
- Virginia (Norfolk): Emerging as a compliance-friendly hub for retail replenishment and LTL volumes.
- Outlook: East Coast growth remains steady, bolstered by nearshoring trends and retailers optimizing for faster U.S. inland distribution.
Gulf Coast:
- Houston: Stable volumes supported by re-routed Asian imports via Ensenada and increased Mexico cross-border traffic.
- Veracruz & Ensenada: Seeing a measurable uptick in transload activity, particularly for Mexico–Asia container freight. Both are becoming strategic bypass hubs for shippers avoiding congestion and tariffs at LA Basin ports.
- Outlook: Gulf Coast ports will remain hot through summer, driven by energy, automotive, and construction-linked imports. Expect inland hubs like Dallas and Atlanta to see associated volume pressure.

Transportation Events

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BM2 NEWS & Highlights

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