Industry Market Trends

GENERAL MARKET TRENDS

Fuel Index:

Diesel National Averages:
- This Week: $3.805 gallon
- Last Week: $3.812/gallon
- Weekly Change: $0.007
- Year-over-Year Change: $0.037

Summary:

Diesel is holding near $3.80/gal. Geopolitical instability and heat-driven energy demand are exerting upward pressure. Watch for fuel surcharges on longer hauls if Middle East conflict or domestic storms escalate.

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

RPM Monthly Movers:

National RPM Month-to-Month Changes:
- Dry Van Markets (July – August) $0.04
- Reefer Markets (July – August) $0.05
- Flatbed Markets (July – August) $0.03

POTENTIAL MARKET DISRUPTORS

Seasonal Trends:

As August begins to unfold, the freight market continues to feel the weight of overlapping seasonal cycles:

Peak produce season in the Southwest and Pacific Northwest
Construction project completions and HVAC surges in the Southeast and Gulf
Port realignments from Asia through Mexico and East Coast hubs as shippers respond to tariff exposure

While national capacity is beginning to realign after the July produce surge, regional volatility remains high. Reefer and flatbed markets continue to lead modal pressure, though softening trends are emerging. Dry van activity is stable but increasingly dependent on port-proximate retail demand, while inland warehouse regions lag behind.

Reefer: TX/NM produce markets also adding (McAllen, Nogales) are peaking with melons, onions, and citrus, while volumes from CA and FL taper. Capacity remains tight but is expected to loosen post–August 10. WA/OR apple season ramps mid-month, offering long-haul opportunities.
Flatbed: Demand from Gulf and Southeast remains strong, driven by HVAC systems, steel coils, and industrial pipe. Roofing freight is approaching its seasonal peak and is expected to decline after August 15. Project freight and infrastructure moves continue to support historically high demand.
Dry Van: Gulf and East Coast ports (Houston, Savannah, Norfolk) are driving tighter capacity into retail distribution centers in the Midwest and Northeast. LTR has eased slightly, but pressure remains in port-adjacent zones. The Midwest stays soft with overstocked inventories.

Other Disruptors:

Steel & Aluminum Tariffs Remain in Force and Pressuring Midwest:
Section 232 tariffs remain at 50% for steel and aluminum, now extending to derivative products like appliances and EV subcomponents as of late June. Midwest flatbed lanes (OH, IL, PA) continue to absorb high volumes of industrial freight as shippers shift sourcing, with elevated rates holding firm into Q3.
U.S.–China Tariffs Reinstated & Rerouting Intensifies:
While the formal expiration of the tariff pause remains murky, duties between 30%–50% on Chinese EVs, electronics, and solar components have already resumed. This has led to a surge in rerouted freight through Mexico and Canada, with dry van and LTL demand up sharply in cross-border zones leveraging USMCA trade protections.
Cross-Border Freight Conditions Tight but Stable:
Border wait times at Laredo, Nogales, and El Paso remain elevated due to increased customs scrutiny and classification audits. Reefer and LTL lanes tied to compliance-heavy freight (auto, dairy, citrus) remain congested. Meanwhile, Canada continues to support elevated volumes of pipeline and automotive freight into Midwest hubs like Detroit and Chicago.
Port Diversions Holding:
LA and Long Beach volumes remain roughly 10–15% below 2024 levels as Gulf and East Coast ports maintain their modal dominance. Freight continues to divert toward Savannah, Charleston, and Houston, feeding tight capacity conditions in inland transload hubs such as Dallas and Atlanta.
Middle East Tensions Escalate/ Elevated Global Shipping Volatility:
Naval tensions in the Red Sea and Persian Gulf have escalated following drone and missile strikes on commercial vessels, including the sinking of the MV Eternity C. Major container carriers are rerouting via the Cape of Good Hope, extending transit times and driving up ocean surcharges and diesel futures. U.S.-bound supply chains with Asian or Middle Eastern origin remain exposed to delay and cost risks through Q3.

MARKET PREDICTIONS & RATE TRENDS

Capacity & Rate Trends:

Dry Van:

Capacity: Tight near Gulf/East Coast ports. Inland remains looser, especially in Midwest.
Rates: Holding Flat MoM, up 0.5% YoY.
Forecast: Expect firmness through September near ports. Warehouse congestion will keep Midwest softer.

Reefer:

Capacity: Still tight near TX/NM and WA/OR. CA and FL volumes tapering.
Rates: Up 1.3% WoW | down 1.3% YoY.
Forecast: Cooling post-Aug 10 in the Southwest. Long-haul PNW lanes should remain elevated through mid-Sept.

Flatbed:

Capacity: Softening slightly but remains historically tight in the Gulf and Southeast.
Rates: Down slightly MoM | up 1.6% YoY.
Forecast: HVAC and steel-related freight to sustain pressure. Midwest tariff exposure could trigger rate swings.

Overall Capacity Rebalancing & Forecast:

Dry Van: Capacity is stable nationally but increasingly bifurcated. Port-driven lanes near Savannah, Norfolk, and Houston are tightening as import flows accelerate ahead of the retail cycle. However, the Midwest remains oversupplied due to excess inventories and slower retail movement. Brokers should expect firm conditions near East Coast ports, but softer volumes and compressed margins inland.
Reefer: Remains one of the tightest segments due to overlapping harvests — melons and onions out of McAllen,TX, WA apples just starting, and FL citrus fading. Spot premiums are beginning to soften, but volume and compliance needs remain strong. Expect easing conditions south of I-10, but tightening on long-haul lanes out of the Pacific Northwest.
Flatbed: While softening from June’s highs, flatbed capacity remains historically tight, especially out of Texas and Gulf states. HVAC, energy freight, and steel lanes are keeping pressure on Southeast and Midwest corridors. Tariff enforcement is amplifying rate variability on industrial lanes tied to infrastructure and construction.
Cross border freight: Mexico: Delays continue at key crossings due to customs inspections and tariff enforcement. Canada: Pipeline and auto parts exports remain strong, supporting outbound flows into U.S. manufacturing zones. Outlook: Nearshoring keeps dry van and LTL volumes elevated. Live quoting essential on all cross-border and compliance-driven freight.
LTL: Remains resilient, supported by aftermarket demand, e-commerce replenishment, and Mexico/U.S. compliance lanes. Border hubs like Laredo, Nogales, and Detroit are high-volume pressure points. Regional warehouse expansion is amplifying density needs in final-mile and short-haul LTL networks.

Key Takeaways:

Dry Van Demand: Stable overall, tightening in retail zones.
Reefer Demand: High near Southwest border; shifting northward.
Flatbed Demand: Holding but more variable. Steel rates reactive.
Tariff Impacts: Ongoing enforcement sustaining Midwest volatility.

Port Adjustments & Supply Chain Rebalancing:

West Coast:
- LA/Long Beach: Still operating ~10–15% below 2024 levels due to prolonged softness in China-origin bookings, blank sailings, and persistent rerouting of tariff-sensitive freight. Labor concerns have faded, but capacity remains underutilized.
- Seattle/Tacoma: Intermodal and ocean volumes remain stagnant. PNW import diversification remains limited, keeping pressure off local capacity.
- Outlook: Without tariff rollback or a major spike in Chinese exports, West Coast recovery is unlikely in Q3. Modal leakage toward East and Gulf Coast ports will persist.
East Coast:
- Savannah & Charleston: Still gaining import share due to customs reliability, low congestion, and inland speed advantages. Retailers are favoring these gateways for fall replenishment.
- Virginia (Norfolk): Solidifying its role as a strategic node for compliance-heavy freight and regional LTL flows. Volume stability continues.
- Outlook: Steady growth, particularly in consumer-packaged goods and cross-dock traffic supporting Northeast retail hubs.
Gulf Coast:
- Houston: Volumes are stable and steadily rising, benefiting from Asia–Mexico transloads and inland U.S. distribution via I-10 and I-35 corridors. Construction and energy equipment are key volume drivers.
- Veracruz & Ensenada: Seeing sustained transload demand, especially for Asian-origin freight rerouted to avoid West Coast tariffs. These ports are increasingly embedded in U.S. freight strategies.
- Outlook: Gulf Coast ports will remain hot zones through Q3, particularly with Mexico–U.S. cross-border synergies. Expect pressure on Dallas, San Antonio, and Atlanta networks.

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