Imagine standing at a crossroads in the freight transportation market, with countless vehicles rushing past—each decision carrying significant consequences for business viability. Faced with economic downturns, tariff barriers, and evolving LTL and TL markets, how can companies cut through the uncertainty to find a path toward growth? Jason Seidl, Managing Director at TD Cowen, recently shared critical insights during a conversation with Jeff Berman, News Editor at Logistics Management Group, at the SMC3 JumpStart 2025 conference.
1. The Current State of Freight: Dawn After the Darkness?
Seidl noted that the trucking industry is experiencing its longest downturn in his nearly three-decade career. Typically, economic downturns last between six and 18 months, but the current slump, which began in July 2022, shows no clear signs of recovery. However, recent industrial data suggests cautious optimism. TD Cowen's quarterly survey indicates that private carriers and rail shippers are increasingly confident about economic prospects, with business growth expectations rising by 50 to 80 basis points quarter-over-quarter. Even more encouraging, the percentage of respondents expressing confidence in the broader economy surged from 20%-30% to 60%.
2. The Impact of Tariffs: Reshaping Supply Chains
Tariffs continue to influence North American trade activity. Seidl emphasized that supply chain adjustments take time, and the increased costs ultimately affect consumers, creating short-term market disruptions. Survey data reveals that over 25% of shippers have already pulled forward some shipments—though most increases remain in the 0-10% range—indicating preparations for tariff-related challenges.
3. The 2024 Peak Season: A Mixed Outlook
While container volumes at ports like Los Angeles have increased, Seidl observed that this hasn't translated into the trucking growth many anticipated. The 2024 peak season has been underwhelming compared to pandemic-era surges. Additionally, fewer working days between Thanksgiving and Christmas have introduced further logistical complications.
4. AI in Logistics: The Future Is Here
Artificial intelligence (AI) holds transformative potential for logistics. Seidl highlighted AI's ability to reduce labor and insurance costs, with automation emerging as a key application—and a focal point in ILA-USMX negotiations.
5. Nearshoring: A Supply Chain Reality
Nearshoring is gaining momentum, with both shippers and carriers increasing investments in Mexico and domestic U.S. operations. Seidl predicts long-term benefits, including enhanced cross-border logistics and renewed confidence among carriers.
6. Mergers and Acquisitions: Accelerating Market Consolidation
M&A activity remains robust in logistics and freight. Seidl anticipates more deals in 2025, ranging from large-scale acquisitions to smaller, growth-focused transactions.
7. Interest Rate Cuts: Stimulating Economic Activity
The Federal Reserve's 2024 rate cuts could invigorate the housing market—a critical driver for trucking demand. As Seidl noted, "A new home requires seven truckloads of freight," underscoring the sector's interconnectedness with broader economic trends.
8. LTL vs. TL: Shifting Preferences
With narrowing price differentials, some shippers are shifting from less-than-truckload (LTL) to truckload (TL) transportation. Seidl views this as a fluid dynamic: if TL rates rise, shippers may revert to LTL networks. Additionally, differing operational models mean that if TL opportunities expand, some drivers may transition back to TL.
9. Market Outlook: Diverging Paths for LTL and TL
Seidl expressed greater optimism for TL than LTL markets. TL rates have already increased by 2%-3%, with potential for further 3%-5% growth during bid season. In contrast, LTL rates—after years of sustained increases—may plateau in the near term.
Conclusion
Seidl's analysis paints a complex picture of the freight transportation landscape. Economic pressures, tariffs, technological disruption, and market consolidation present both challenges and opportunities. Success will require deep market insight, technological adoption, and strategic agility.