While some zero-load (LTL) freight companies benefited from a peak in imports prior to the tariffs, the overall U.S. freight market remains in a volatile state. Amid intensifying trade tensions between the US and China and China, regional demand is rising, overall a zero-star distribution.
Significant demand growth occurred in Texas and other southern border regions of the United States. Averitt, a regional transportation company in Tennessee, said they are seeing “significant but manageable” growth in cross-border LTL freight and forwarding services ahead of the new round of tariffs.
Kent Williams, Executive Vice President of Sales at Averitt, said: “Over the past 30 to 45 days, the forwarding business at our southern ports has become noticeably busy, which is closely related to shippers seizing shipments before the tariffs take effect.”
But this surge may be just a cornucopia for now.
Import orders from China are declining markedly. Averitt's Non-Ship Public Carriers (NVOCC) pointed out that import orders fell sharply, leading to an air crash on vessels leaving China in May.
Mike Regan, CEO of TranzAct Technologies, said bluntly: “The market remains weak and shows no signs of warming up.”
The Producer Price Index (PPI) for U.S. Long-Term LTL Services fell slightly in March, after rising markedly in January and February. Analysts noted that this may reflect the short-term effect of early shipments, rather than persistent market demand.
Estes Express, a national LTL leader, said there was some growth at the beginning of the year, but it was not clear whether it was directly related to tariffs. “Too many variables can cause volatility, from weather to manufacturing performance,” said Webb Estes, president of the company.
Roadrunner and AFS Logistics noted no significant change in their freight volumes, and AFS expects the second-quarter LTL index to decline by 0.4 percentage points, although it is still slightly up from the same period last year.
Many commodities are taking a bullish stance as U.S. manufacturing slows.
Aaron LaGanke of AFS Logistics says: “Everyone wants to make decisions with data, but when information changes every day, it's hard for anyone to make the following conclusions.”
Wall Street investment firm Stifel still expects the second-quarter LTL market to show steady to moderate growth, but “demand fundamentals fluctuate sharply”.
To the shipper: The market is still expected to be volatile. If you are importing and exporting goods from ports or border areas, please arrange transportation in advance.
To the carrier: Regional flexibility will be key. LTL operators close to ports and borders will have a better chance of capturing short-term dividends than national operators.
